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Quantifying misallocation of public housing

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  • Buurma-Olsen, Jennifer
  • Koster, Hans R.A.
  • van Ommeren, Jos
  • Damsté, Jort Sinninghe

Abstract

We empirically investigate how rent control combined with the use of a non-market allocation mechanism – centralised waiting lists – affects the efficiency of housing allocation among public-housing tenants. We show that, on average, Dutch public-housing tenants consume a house whose value differs by 7.5% from what they would consume under an efficient allocation. This entails particularly large transfers in housing consumption from younger households to older households. The annual welfare loss arising from misallocation within the public-housing sector is modest, estimated at around €65 per tenant.

Suggested Citation

  • Buurma-Olsen, Jennifer & Koster, Hans R.A. & van Ommeren, Jos & Damsté, Jort Sinninghe, 2025. "Quantifying misallocation of public housing," Journal of Public Economics, Elsevier, vol. 242(C).
    • Handle: RePEc:eee:pubeco:v:242:y:2025:i:c:s0047272724002081
    DOI: 10.1016/j.jpubeco.2024.105272
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    More about this item

    Keywords

    Misallocation; Public housing; Rent control; Non-market allocation;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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