Cookies?
Library Header Image
LSE Research Online LSE Library Services

Stamp duty and household mobility: regression discontinuity evidence from the UK

Hilber, Christian and Lyytikainen, Teemu (2012) Stamp duty and household mobility: regression discontinuity evidence from the UK. London School of Economics and Political Science. (Unpublished)

Full text not available from this repository.

Abstract

We estimate the effect of the UK real estate transfer tax on household mobility using household level panel data. We exploit a discontinuity in the tax schedule as a quasiexperimental setting which allows us to isolate the impact of the stamp duty from other determinants of mobility. Our empirical strategy compares households with self-assessed house values on either sides of a cut-off value where stamp duty liabilities jump sharply while controlling for flexible but smooth functions of house values. We find that a higher stamp duty negatively affects a household’s propensity to move and the expectation that a move is imminent. Our results suggest that a £5,000 increase in the stamp duty reduces mobility by roughly 30 percent. We conclude that the UK stamp duty adversely affects the functioning of housing- and labor markets.

Item Type: Monograph (Working Paper)
Additional Information: © 2012 The Authors
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior; Transaction Costs; Property Rights
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H27 - Other Sources of Revenue
R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R21 - Housing Demand
R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R31 - Housing Supply and Markets
R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R38 - Government Policies; Regulatory Policies
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 09 Jul 2012 13:16
URL: http://eprints.lse.ac.uk/44686/

Actions (login required)

Record administration - authorised staff only Record administration - authorised staff only