Implicit Rents from Own-Housing and Income Distribution. Econometric Estimates for Greater Buenos Aires
AbstractMost income studies do not take into account the implicit rent obtained by households who inhabit their own dwellings, a fact that introduces a potentially relevant bias in inequality, poverty, and welfare measures. In this paper we estimate these implicit rents for the Greater Buenos Aires area from information of Argentinaâs National Household Expenditures Survey (ENGH) of 1996/7. Based on a sample of households that rent their dwellings, quantile regressions are used to estimate observed rents from a hedonic model. Estimated coefficients are applied to households that do not rent their houses or apartments in order to predict the implicit rent derived from living in an owned house. Estimated implicit rents are added to the standard notion of household income and various inequality measures are reestimated. We find that the consideration of these implicit rents reduces inequality due to an income elasticity of spending in housing less than one, and to the relatively large proportion of house owners in the lower strata of the income distribution.
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Bibliographic InfoPaper provided by Universidad de San Andres, Departamento de Economia in its series Working Papers with number 58.
Date of creation: May 2003
Date of revision: May 2004
Publication status: Published as "Implicit Rents and Income Distribution. Estimates for Greater Buenos Aires" in Journal of Income Distribution, 12 (1-2), Spring-Summer, 2004
rent; income distribution; Buenos Aires;
Other versions of this item:
- Leonardo Gasparini & Walter Sosa Escudero, 2004. "Implicit Rents from Own-Housing and Income Distribution: Econometric Estimates for Greater Buenos Aires," CEDLAS, Working Papers 0014, CEDLAS, Universidad Nacional de La Plata.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
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