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The incidence of UK housing benefit: evidence from the 1990s reforms

Gibbons, Stephen and Manning, Alan (2006) The incidence of UK housing benefit: evidence from the 1990s reforms. Journal of Public Economics, 90 (4-5). pp. 799-822. ISSN 0047-2727

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Abstract

This paper estimates the incidence of the most important UK rent subsidy, housing benefit (HB). It exploits changes to housing benefit in 1996 and 1997 that reduced the maximum subsidy payable. The research design is based on the fact that the changes only applied to new claimants and not to pre-existing claimants. We use difference-in-differences to estimate the size of the treatment effect. We show that the changes did have an effect on the level of housing subsidy with an estimated fall of 10–15% in benefit receipt in the treatment group relative to the control group. There is also evidence that rents paid fell by 6–11%. We find no evidence this can be explained by a fall in housing consumption by the treatment group. Our estimates imply that between 60% and two-thirds of the incidence of the subsidy reduction was on landlords.

Item Type: Article
Official URL: http://www.journals.elsevier.com/journal-of-public...
Additional Information: © 2006 Elsevier
Library of Congress subject classification: H Social Sciences > HT Communities. Classes. Races
H Social Sciences > HN Social history and conditions. Social problems. Social reform
Journal of Economic Literature Classification System: R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R31 - Housing Supply and Markets
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H22 - Incidence
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Departments > Economics
Departments > Geography and Environment
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 28 Jan 2008
URL: http://eprints.lse.ac.uk/3179/

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