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Paper No' CEPDP0597: | Full paper
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Keywords: Housing Subsidies; Tax Incidence
JEL Classification: H22; R31
Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: CEP Discussion Papers
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Abstract:Housing Benefit (HB) in the UK subsidizes the rent of tenants in both the private and public sectors. Its share in total welfare benefits has risen markedly through time and there is widespread dissatisfaction with it. But, reform has been very slow. One important issue is the extent to which the incidence of HB is actually on the tenants. Exploiting two data sets from the mid-1990s when the subsidy regime changed for some tenants but not for others, this paper explores the incidence. We find that some of the incidence is on landlords though our two data sets differ in the extent to which this is true. We also find evidence in support of a ¿matching¿ model of the rental market rather tha n a perfectly competitive one.
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