Do People Respond to the Mortgage Interest Deduction? Quasi-Experimental Evidence from Denmark

• 成果类型: Article
• 署名作者: Gruber, Jonathan; Jensen, Amalie; Kleven, Henrik
• 署名单位: Massachusetts Institute of Technology (MIT); National Bureau of Economic Research; University of Copenhagen; Princeton University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20170366
• 发表日期: 2021
• 页码: 273-303
• 关键词: income-tax

摘要

Using a major reform that scaled back the mortgage interest deduction for middle- and high-income households in Denmark, we study how tax subsidies affect housing decisions. We present four main findings. First, the mortgage deduction has a precisely estimated zero effect on homeownership for high- and middle-income households. Second, the mortgage deduction has a clear effect on housing demand at the intensive margin, inducing homeowners to buy larger and more expensive houses. Third, the deduction has sizeable effects on household financial decisions, inducing them to increase indebtedness. Finally, the reduction of the tax subsidy lowered equilibrium house prices.