IDEAS home Printed from https://ideas.repec.org/p/hhs/umnees/0856.html
   My bibliography  Save this paper

Self-Control Problems and Conspicuous Housing Consumption:Implications for Tax Policy

Author

Listed:
  • Aronsson, Thomas

    (Department of Economics, Umeå School of Business and Economics)

  • Mannberg, Andrea

    (Department of Economics, Umeå School of Business and Economics)

Abstract

During the latest decades, household mortgage loans have increased substantially in many countries. We develop an OLG model where housing is a positional consumption good (such that housing choices are partly driven by relative consumption concerns), and where the consumers are also characterized by a preference for immediate gratification due to quasi-hyperbolic discounting. The purpose is to examine how a paternalistic government may reach its preferred resource allocation through a mix of taxes/subsidies on capital income and housing wealth. Our results show that the optimal policy typically implies a marginal savings-subsidy, while the marginal housing wealth may either be taxed or subsidized. Upward social comparisons imply a possible scenario where the housing wealth of the young generation is subsidized and the housing wealth of the middle-aged generation is taxed at the margin.

Suggested Citation

  • Aronsson, Thomas & Mannberg, Andrea, 2013. "Self-Control Problems and Conspicuous Housing Consumption:Implications for Tax Policy," Umeå Economic Studies 856, Umeå University, Department of Economics.
    • Handle: RePEc:hhs:umnees:0856
    as

    Download full text from publisher

    File URL: http://www.econ.umu.se/DownloadAsset.action?contentId=210288&languageId=3&assetKey=ues856
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aronsson, Thomas & Mannberg, Andrea, 2015. "Relative consumption of housing: Marginal saving subsidies and income taxes as a second-best policy?," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 439-450.

    More about this item

    Keywords

    Conspicuous consumption; self-control problem; housing; optimal taxation;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:umnees:0856. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: David Skog (email available below). General contact details of provider: https://edirc.repec.org/data/inumuse.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.