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When education policy and housing policy interact: can they correct for the externalities?

Author

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  • Yifan Gong

    (University of Western Ontario)

  • Charles Ka Yui Leung

    (City University of Hong Kong)

Abstract

A simple spatial equilibrium model with the peer group effect and local public finance can match several stylized facts of the labor market and housing market in the United States. Our counter-factual policy analyses generate further insights. First, the welfare of households can change as the government varies the location of public housing units with a neighborhood. Second, even though the public housing policy and housing voucher program deliver similar results at the household level, they are different as the former tends to benefit the offspring more, while the latter is the reverse. Third, combining school finance consolidation policy with public housing policy can lead to a Pareto improvement. Unfortunately, a policy that can benefit all agents, in the long run, may not be implemented as it can hurt some agents in the short run.

Suggested Citation

  • Yifan Gong & Charles Ka Yui Leung, 2019. "When education policy and housing policy interact: can they correct for the externalities?," GRU Working Paper Series GRU_2019_031, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    • Handle: RePEc:cth:wpaper:gru_2019_031
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    Citations

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    Cited by:

    1. Charles Ka Yui Leung & Joe Cho Yiu Ng & Edward Tang, 2020. "Why is the Hong Kong Housing Market Unaffordable? Some Stylized Facts and Estimations," Globalization Institute Working Papers 380, Federal Reserve Bank of Dallas.
    2. Charles Ka Yui LEUNG, 2022. "Housing and Macroeconomics," ISER Discussion Paper 1197, Institute of Social and Economic Research, Osaka University.
    3. Suzuki, Masatomo & Hino, Kimihiro & Muto, Sachio, 2022. "Negative externalities of long-term vacant homes: Evidence from Japan," Journal of Housing Economics, Elsevier, vol. 57(C).
    4. Dalmazzo, Alberto & de Blasio, Guido & Poy, Samuele, 2022. "Can Public Housing Trigger Industrialization?," Journal of Housing Economics, Elsevier, vol. 57(C).
    5. Ka Shing Cheung & Chung Yim Yiu & Chuyi Xiong, 2021. "Housing Market in the Time of Pandemic: A Price Gradient Analysis from the COVID-19 Epicentre in China," JRFM, MDPI, vol. 14(3), pages 1-17, March.
    6. Deng, Qiu Shi & Alvarado, Rafael & Cheng, Fang Nan & Cuesta, Lizeth & Wang, Chun Bao & Pinzón, Stefania, 2023. "Long-run mechanism for house price regulation in China: Real estate tax, monetary policy or macro-prudential policy?," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 174-186.
    7. Kuzey Yılmaz & Muharrem Yeşilırmak, 2023. "Access to transportation, residential segregation, and economic opportunity," Contemporary Economic Policy, Western Economic Association International, vol. 41(1), pages 103-127, January.
    8. Charles Ka Yui Leung & (single author only), 2021. "Handbook of Real Estate and Macroeconomics: An Introduction," ISER Discussion Paper 1137, Institute of Social and Economic Research, Osaka University.

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    More about this item

    Keywords

    school finance consolidation; public housing; housing voucher; endogenous sorting mechanism; short-run rigidity versus long-run flexibility;
    All these keywords.

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General

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