Distributional consequences of surging housing rents

• 成果类型: Article
• 署名作者: Grossmann, Volker; Larin, Benjamin; Loefflad, Hans Torben; Steger, Thomas
• 署名单位: University of Fribourg; Leibniz Association; Ifo Institut; IZA Institute Labor Economics; University of London; University College London; University of St Gallen; University of Zurich; Leipzig University; Leibniz Association; Leibniz Institut fur Wirtschaftsforschung Halle (IWH)
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2021.105275
• 发表日期: 2021
• 关键词: Macroeconomics and housing; Long-term growth; Schwabe's law; wealth inequality; welfare

摘要

The trajectories of real housing rents and real house prices have shown an upward sloping trend in most industrialized countries since WW2. The burden of rising housing rents is likely to be distributed unequally because income-poor households devote a larger share of their consumption expenditures on housing than income-rich households. This inverse relation between income and the expenditure share of housing is labeled Schwabe's law. We analyze how the dynamics in housing rents affect household welfare, account-ing for Schwabe's law and the endogeneity of housing rents in general equilibrium. We show analytically that Schwabe's law amplifies heterogeneous welfare effects that operate through housing rent changes. We then study how zoning deregulation affects household welfare in general equilibrium. Zoning deregulation triggers a temporarily slower growth in housing rents and house prices. The representative household ex-periences a welfare gain of 0.37 percent. This welfare effect is unequally distributed at the micro-level. The highest welfare gain amounts to 12.52 percent, while the highest welfare loss amounts to 1.63 percent. Lower housing rent growth drives most of the overall welfare gain, and Schwabe's law is responsible for most of the variation in the welfare gain across households. (c) 2021 Elsevier Inc. All rights reserved.