|This centre is a member of The LSE Research Laboratory [RLAB]: CASE | CVER | CEP | SERC | STICERD||Cookies?|
Christian A. L.
Paper No' SERCDP0091: | Full paper
Save Reference as: BibTeX File | EndNote Import File
Keywords: House price capitalization; homeownership, local public goods, club goods, land use regulation, land and housing supply, incentives to invest, redistribution
JEL Classification: D71; R21; R31
Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: SERC Discussion Papers
Share this page: Google Bookmarks | Facebook | Twitter
Abstract:In this article I argue that the extent to which fiscal variables are capitalized into house prices has important economic implications. I synthesize an emerging literature that explores the conditions under which public and private investments and intergovernmental transfers are capitalized into local house prices and the broader implications of such capitalization. The main insights are: (i) House price capitalization is more pronounced in locations with strict regulatory and geographical supply constraints; (ii) capitalization can – under certain conditions – induce the provision of durable local public goods and club goods; and (iii) capitalization effects – which are habitually ignored by policy makers – have important adverse consequences for a wide range of policies such as intergovernmental aid or the mortgage interest deduction.
Copyright © RLAB & LSE 2003 - 2019 | LSE, Houghton Street, London WC2A 2AE | Contact: RLAB | Site updated 15 June 2019