Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296857 
Year of Publication: 
2023
Series/Report no.: 
ISER Discussion Paper No. 1214
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
In our evaluation of the housing expenditure share cap, a macroprudential policy, we discover the importance of modeling space. The spatial considerations allow households to sort into segmented housing markets based on income. Our model generates the observed negative relationship between housing expenditure share and income. More importantly, the cap policy causes a more considerable reduction in housing costs for low-income families than for high-income families in a spatial model. Depending on the assumption of households' preference, this mechanism leads to a minor increase or even a modest decrease in welfare inequality in a spatial model than in a spaceless model.
Subjects: 
housing expenditure share
monocentric model of a city
spatialsorting
welfare inequality
JEL: 
D04
R20
R30
Document Type: 
Working Paper

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