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Accounting for owner-occupied dwelling services: Aggregates and distributions

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  • Garner, Thesia I.
  • Short, Kathleen
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    Abstract

    Research linking macro and micro statistics of dwelling services is in its infancy in the U.S. including work by the Bureau of Economic Analysis, Bureau of Labor Statistics, and the Census Bureau. Comparisons of aggregated estimates generated from micro-level data to estimates at the macro-level can inform both levels on the accuracy and precision of methods and data sources. In this study, the treatments of housing in the macro statistics of the National Accounts and in the micro statistics of household expenditure and income surveys are examined. Three approaches to value dwelling services using household survey data are compared: capitalization rate, hedonic, and rental equivalence. Estimates are produced using data from the U.S. Consumer Expenditure Survey and American Housing Survey. Estimated aggregates of implicit net rental income from owner-occupied housing are compared to the aggregate value in the National Accounts. Possible sources of differences in the macro- and micro-based aggregates are discussed. The effects of adding net implicit rental income on income distributions are examined, particularly on inferences about the relative well-being by the age of householder. Overall, only marginal reductions in income equality result when net rental incomes are added to before tax money income; this only occurs when reported rental equivalence and return to home equity are used as methods of rent estimation.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Housing Economics.

    Volume (Year): 18 (2009)
    Issue (Month): 3 (September)
    Pages: 233-248

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    Handle: RePEc:eee:jhouse:v:18:y:2009:i:3:p:233-248

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    Web page: http://www.elsevier.com/locate/inca/622881

    Related research

    Keywords: Dwelling services Macro-micro linkages Distributional analysis;

    References

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    1. Randal Verbrugge & Thesia I. Garner, 2009. "Reconciling User Costs and Rental Equivalence: Evidence from the U.S. Consumer Expenditure Survey," Working Papers 427, U.S. Bureau of Labor Statistics.
    2. Gyourko, Joseph & Linneman, Peter & Wachter, Susan, 1999. "Analyzing the Relationships among Race, Wealth, and Home Ownership in America," Journal of Housing Economics, Elsevier, vol. 8(2), pages 63-89, June.
    3. Antonia Diaz & Maria J. Luengo-Prado, 2006. "On The User Cost And Homeownership," Economics Working Papers we065421, Universidad Carlos III, Departamento de Economía.
    4. Slesnick, Daniel T, 1998. "Are Our Data Relevant to the Theory? The Case of Aggregate Consumption Expenditures, and Empirical Consumption and Savings," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(1), pages 52-61, January.
    5. Onrubia, Jorge & Rodado, M. Carmen & Ayala, Luis, 2009. "How do services of owner-occupied housing affect income inequality and redistribution?," Journal of Housing Economics, Elsevier, vol. 18(3), pages 224-232, September.
    6. Hendershott, Patric H. & Ong, Rachel & Wood, Gavin A. & Flatau, Paul, 2009. "Marital history and home ownership: Evidence from Australia," Journal of Housing Economics, Elsevier, vol. 18(1), pages 13-24, March.
    7. Asberg, Per, 1999. "Housing Decisions of Young Swedish Adults," Journal of Housing Economics, Elsevier, vol. 8(2), pages 116-143, June.
    8. Diewert, Erwin & Nakamura, Alice O., 2009. "Accounting for Housing in a CPI," Economics working papers erwin_diewert-2009-19, Vancouver School of Economics, revised 12 Mar 2009.
    9. Boehm, Thomas P., 1993. "Income, Wealth Accumulation, and First-Time Homeownership: An Intertemporal Analysis," Journal of Housing Economics, Elsevier, vol. 3(1), pages 16-30, December.
    10. Iwata, Shinichiro & Yamaga, Hisaki, 2008. "Rental externality, tenure security, and housing quality," Journal of Housing Economics, Elsevier, vol. 17(3), pages 201-211, September.
    11. Slesnick, Daniel T, 1992. "Aggregate Consumption and Saving in the Postwar United States," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 585-97, November.
    12. Frick, Joachim R. & Grabka, Markus M. & Smeeding, Timothy M. & Tsakloglou, Panos, 2010. "Distributional Effects of Imputed Rents in Five European Countries," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 167-179.
    13. Frick, Joachim R. & Grabka, Markus M., 2003. "Imputed Rent and Income Inequality: A Decomposition Analysis for Great Britain, West Germany and the U.S," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 513-537.
    14. Matt Chambers & Carlos Garriga & Don Schlagenhauf, 2009. "The Loan Structure and Housing Tenure Decisions in an Equilibrium Model of Mortgage Choice," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(3), pages 444-468, July.
    15. Buckley, Robert & Cartwright, Kim & Struyk, Raymond & Szymanoski, Edward, 2003. "Integrating housing wealth into the social safety net for the Moscow elderly: an empirical essay," Journal of Housing Economics, Elsevier, vol. 12(3), pages 202-223, September.
    16. Yates, Judith, 1994. "Imputed Rent and Income Distribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 40(1), pages 43-66, March.
    17. VanderHart, Peter G., 1998. "The Housing Decisions of Older Households: A Dynamic Analysis," Journal of Housing Economics, Elsevier, vol. 7(1), pages 21-48, March.
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    Cited by:
    1. Simone Pellegrino & Massimiliano Piacenza & Gilberto Turati, 2011. "Assessing the Distributional Effects of Housing Taxation in Italy: From the Actual Tax Code to Imputed Rent," CESifo Working Paper Series 3368, CESifo Group Munich.
    2. Panos Tsakloglou & Francesco Figari & Alari Paulus & Holly Sutherland & Gerlinde Verbist & Francesca Zantomio, 2014. "Taxing home ownership: distributional effects of including net imputed rent in taxable income," EcoMod2014 7474, EcoMod.
    3. repec:ese:emodwp:em4-12 is not listed on IDEAS
    4. Ansgar Belke & Christian Dreger & Richard Ochmann, 2012. "Do Wealthier Households Save More? – The Impact of the Demographic Factor," Ruhr Economic Papers 0338, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. Randal Verbrugge & Thesia I. Garner, 2009. "Reconciling User Costs and Rental Equivalence: Evidence from the U.S. Consumer Expenditure Survey," Working Papers 427, U.S. Bureau of Labor Statistics.
    6. Francesco Figari & Alari Paulus & Holly Sutherland & Panos Tsakloglou & Gerlinde Verbist & Francesca Zantomio, 2012. "Taxing home ownership: distributional effects of including net imputed rent in taxable income," DEOS Working Papers 1209, Athens University of Economics and Business.
    7. Panos Tsakloglou & Francesco Figari & Alari Paulus & Holly Sutherland & Gerlinde Verbist & Francesca Zantomio, 2012. "Taxing home ownership: distributional effects of including net imputed rent in taxable income," EcoMod2012 4323, EcoMod.
    8. Frick, Joachim R. & Grabka, Markus M. & Smeeding, Timothy M. & Tsakloglou, Panos, 2010. "Distributional Effects of Imputed Rents in Five European Countries," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 167-179.
    9. Garrido-Yserte, Rubén & Mañas-Alcón, Elena & Gallo-Rivera, Maria Teresa, 2012. "Housing and cost of living: Application to the Spanish regions," Journal of Housing Economics, Elsevier, vol. 21(3), pages 246-255.

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