IDEAS home Printed from
   My bibliography  Save this article

Moving and housing expenditure: Transaction costs and disequilibrium


  • Venti, Steven F.
  • Wise, David A.


The paper emphasizes initially the effects of moving transaction costs on the potential effect of government rent subsidy programs. As a concomitant to this analysis, the paper reaffirms the low income elasticities of housing expenditure among low-income renters found by others. Moving transaction costs are high on average among renters in our sample but vary widely between geographic regions and evidently vary a great deal among families as well. By our measure, transaction costs reflect monetary and especially non-monetary gains and losses associated with moving. Moving transaction costs in conjunction with low income elasticities make government lump-sum transfers very ineffective in increasing housing expenditure among low-incomerenters.A dollar of unconstrained transfer payment would increase housing expenditure by only 2 to 7 cents in the two cities in our data set. Minimum rent plans, that make the transfer payment conditional on spending at leasta minimum amount on rent, have larger effects on average than unconstrained transfers. Typical programs might increase rent by 10 to 30 cents per dollar of transfer payment. But families who spend the least on rent a real so those least likely to benefit from the minimum rent programs. To obtain payments under these plans, families who would otherwise spend less than the minimum must surmount the transaction costs associated with moving and must also reallocate income to favor housing in proportions that may be far from their preferred allocations. Thus only a small proportion of families with initial market rents below the minimum will ultimately participate in the programs. And of the total payments to these families, 15 to 32 percent is dead weight loss, according to our estimates. In addition, we find that because moving transaction costs and income elasticities vary widely among regions, the effects of any given government program are also likely to vary greatly from one region to the other.As a fortuitous benef
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Venti, Steven F. & Wise, David A., 1984. "Moving and housing expenditure: Transaction costs and disequilibrium," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 207-243.
  • Handle: RePEc:eee:pubeco:v:23:y:1984:i:1-2:p:207-243

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    1. King, Mervyn A., 1980. "An econometric model of tenure choice and demand for housing as a joint decision," Journal of Public Economics, Elsevier, vol. 14(2), pages 137-159, October.
    2. Weinberg, Daniel H. & Friedman, Joseph & Mayo, Stephen K., 1981. "Intraurban residential mobility: The role of transactions costs, market imperfections, and household disequilibrium," Journal of Urban Economics, Elsevier, vol. 9(3), pages 332-348, May.
    3. Friedman, Joseph & Weinberg, Daniel H., 1982. "Housing consumption under a constrained income transfer," Journal of Urban Economics, Elsevier, vol. 11(3), pages 253-271, May.
    4. Mervyn A. King, 1980. "An Econometric Model of Tenure Choice and Demand for Housing as a Joint Decision," NBER Chapters, in: Econometric Studies in Public Finance, pages 137-159, National Bureau of Economic Research, Inc.
    5. Jerry A. Hausman & David A. Wise, 1980. "Discontinuous Budget Constraints and Estimation: The Demand for Housing," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 75-96.
    6. Friedman, Joseph & Weinberg, Daniel H., 1981. "The demand for rental housing: Evidence from the Housing Allowance Demand Experiment," Journal of Urban Economics, Elsevier, vol. 9(3), pages 311-331, May.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    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:eee:pubeco:v:23:y:1984:i:1-2:p:207-243. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Haili He). General contact details of provider: .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.