Hilber, Christian A. L. (2011) The economic implications of house price capitalization: a survey of an emerging literature. SERC discussion paper, SERCDP0091. Spacial Economics Research Centre, London School of Economics and Political Science, London, UK.Full text not available from this repository.
House price capitalization – the adjustment of house prices to changes in local public service and tax levels – has long been thought to be a means of testing for efficiency in the local public sector. In this article I argue that the extent of house price capitalization itself may have important economic implications. In doing so 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/or geographical/physical 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.
|Item Type:||Monograph (Discussion Paper)|
|Additional Information:||© 2011 The Author|
|Library of Congress subject classification:||H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
|Journal of Economic Literature Classification System:||D - Microeconomics > D7 - Analysis of Collective Decision-Making > D71 - Social Choice; Clubs; Committees; Associations
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
|Sets:||Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
|Date Deposited:||09 Jul 2012 13:24|
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