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Implications of homeownership policies on land prices: the case of a French experiment

Author

Listed:
  • Kevin Beaubrun-Diant

    (Université Paris-Dauphine, PSL Research University)

  • Tristan-Pierre Maury

    (EDHEC Business School, Lille, France)

Abstract

We propose to estimate the price effects of a positive housing demand shock on French real estate markets. The "Interest Free Loan" system is expected to support housing demand by first-time buyers. From 2009 to mid-2010, the amount of subsidies paid to first-time buyers was increased. We evaluate the effect of this new housing policy on land parcel prices using a new methodological approach of a hybrid of difference-in-difference and matching techniques, and exploiting geographical differences in the policy design to identify possible inflationary effects. We identify significant but transitory inflationary effects suggesting that land supply elasticity is low in France.

Suggested Citation

  • Kevin Beaubrun-Diant & Tristan-Pierre Maury, 2021. "Implications of homeownership policies on land prices: the case of a French experiment," Economics Bulletin, AccessEcon, vol. 41(3), pages 1256-1265.
    • Handle: RePEc:ebl:ecbull:eb-20-01196
    as

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    References listed on IDEAS

    as
    1. Fack, Gabrielle & Grenet, Julien, 2010. "When do better schools raise housing prices? Evidence from Paris public and private schools," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 59-77, February.
    2. Edward L. Glaeser & Joseph Gyourko & Raven E. Saks, 2005. "Why Have Housing Prices Gone Up?," American Economic Review, American Economic Association, vol. 95(2), pages 329-333, May.
    3. Krupka, Douglas J. & Noonan, Douglas S., 2009. "Empowerment Zones, neighborhood change and owner-occupied housing," Regional Science and Urban Economics, Elsevier, vol. 39(4), pages 386-396, July.
    4. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(2), pages 261-294.
    5. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    6. Edward Ludwig Glaeser & Joseph Gyourko, 2003. "The impact of building restrictions on housing affordability," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 21-39.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Land Prices; Inflation effects; Homeownership Policies;
    All these keywords.

    JEL classification:

    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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