Hilber, Christian A. L. (2015) The economic implications of house price capitalization: a synthesis. SERC Discussion Paper (91). Spatial Economics Research Centre, London.
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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.
| Item Type: | Monograph (Discussion Paper) |
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| Official URL: | http://www.spatialeconomics.ac.uk/ |
| Additional Information: | ©2015 C.A.L. Hilber, |
| Divisions: | Geography & Environment Spatial Economics Research Centre |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HN Social history and conditions. Social problems. Social reform H Social Sciences > HT Communities. Classes. Races |
| JEL classification: | 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 |
| Date Deposited: | 01 May 2015 13:25 |
| Last Modified: | 15 Sep 2023 23:35 |
| Funders: | Economic and Social Research Council, Department for Business Innovation and Skills, Welsh Government |
| URI: | http://eprints.lse.ac.uk/id/eprint/61774 |
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