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Distributional effects of imputed rents in five European countries

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Author Info

  • Frick, Joachim R.
  • Grabka, Markus M.
  • Smeeding, Timothy M.
  • Tsakloglou, Panos

Abstract

Most empirical distributional studies of well-being in developed countries rely on distributions of disposable income. From a theoretical point of view this practice is contentious since a household's command over resources is determined not only by its spending power over commodities it can buy in the market but also on resources available to the household members through non-market mechanisms such as the in-kind provisions of the welfare state and the value of private non-cash incomes. In developed market economies the most important private non-cash income component is imputed rent from owner-occupied or subsidized accommodation. Employing a wider definition of imputed rent that also allows the analyst to capture income advantages among tenants living in rent-subsidized accommodations of various sorts (including rent-free or reduced-rent households), the present paper examines the differential effects of including imputed rents in the concept of resources in five European countries (Belgium, Germany, Greece, Italy and the UK). The results suggest that in almost all cases, the inclusion of imputed rents in the concept of resources leads to a decline in measured levels of inequality and poverty. The main beneficiaries are outright homeowners and households living in rent-free (or heavily subsidized) accommodation--most often older persons. The inclusion of imputed rents in the concept of resources does not lead to substantial changes in the ranking of the countries according to their level of inequality, despite widespread differences in the rates of home ownership and subsidization across the countries studied here.

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Bibliographic Info

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

Volume (Year): 19 (2010)
Issue (Month): 3 (September)
Pages: 167-179

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Handle: RePEc:eee:jhouse:v:19:y:2010:i:3:p:167-179

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

Related research

Keywords: Home ownership Income in-kind Imputed rent Income distribution;

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References

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  4. Joachim R. Frick & Jan Goebel & Markus M. Grabka, 2007. "Assessing the Distributional Impact of "Imputed Rent" and "Non-cash Employee Income" in Microdata: Case Studies Based on EU-SILC (2004) and SOEP (2002)," SOEPpapers on Multidisciplinary Panel Data Research 2, DIW Berlin, The German Socio-Economic Panel (SOEP).
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Citations

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Cited by:
  1. Christos Koutsampelas & Panos Tsakloglou, 2013. "The distribution of full income in Greece," International Journal of Social Economics, Emerald Group Publishing, vol. 40(4), pages 311-330, April.
  2. Paulus, Alari & Sutherland, Holly & Tsakloglou, Panos, 2009. "The distributional impact of in kind public benefits in European countries," EUROMOD Working Papers EM10/09, EUROMOD at the Institute for Social and Economic Research.
  3. repec:ese:iserwp:2009-33 is not listed on IDEAS
  4. Joachim R. Frick & Markus M. Grabka, 2009. "Accounting for Imputed and Capital Income Flows in Income Inequality Analyses," SOEPpapers on Multidisciplinary Panel Data Research 254, DIW Berlin, The German Socio-Economic Panel (SOEP).
  5. Garner, Thesia I. & Short, Kathleen, 2009. "Accounting for owner-occupied dwelling services: Aggregates and distributions," Journal of Housing Economics, Elsevier, vol. 18(3), pages 233-248, September.
  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 & Christos Koutsampelas, 2012. "The distribution of full income in Greece," DEOS Working Papers 1207, Athens University of Economics and Business.
  8. Gerlinde Verbist & Michael Föster & Vaalavou, M., 2013. "GINI DP 74: The Impact of Publicly Provided Services on the Distribution of Resources: Review of New Results and Methods," GINI Discussion Papers 74, AIAS, Amsterdam Institute for Advanced Labour Studies.
  9. 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.
  10. Christos Koutsampelas, 2012. "Immigration and Poverty: Findings from Cyprus," University of Cyprus Working Papers in Economics 13-2012, University of Cyprus Department of Economics.

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