Distributional Effects of Imputed Rents in Five European Countries
Most empirical distributional studies of well-being in developed countries rely on distributions of disposable income. From a theoretical point of view this practice is contentious since a household’s command over resources is determined not only by its spending power over commodities it can buy in the market but also on resources available to the household members through non-market mechanisms such as the in-kind provisions of the welfare state and the value of private non-cash incomes. In developed market economies the most important private non-cash income component is imputed rent from owner-occupied or subsidized accommodation. Employing a wider definition of imputed rent that also allows the analyst to capture income advantages among tenants living in rent-subsidized accommodations of various sorts (including rent-free or reduced-rent households), the present paper examines the differential effects of including imputed rents in the concept of resources in five European countries (Belgium, Germany, Greece, Italy and the UK). The results suggest that in almost all cases, the inclusion of imputed rents in the concept of resources leads to a decline in measured levels of inequality and poverty. The main beneficiaries are outright homeowners and households living in rent-free (or heavily subsidized) accommodation—most often older persons. The inclusion of imputed rents in the concept of resources does not lead to substantial changes in the ranking of the countries according to their level of inequality, despite widespread differences in the rates of home ownership and subsidization across the countries studied here.
Volume (Year): (2010-09)
Issue (Month): ()
|Contact details of provider:|| Postal: Düsternbrooker Weg 120, 24105 Kiel / Neuer Jungfernstieg 21, 20354 Hamburg|
Phone: +49 431 8814-1
Fax: +49 431 8814-520
Web page: http://www.econstor.eu/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Randal Verbrugge & Thesia I. Garner, 2009.
"Reconciling User Costs and Rental Equivalence: Evidence from the U.S. Consumer Expenditure Survey,"
427, U.S. Bureau of Labor Statistics.
- Garner, Thesia I. & Verbrugge, Randal, 2009. "Reconciling user costs and rental equivalence: Evidence from the US consumer expenditure survey," Journal of Housing Economics, Elsevier, vol. 18(3), pages 172-192, September.
- Randal Verbrugge, 2009.
"The Puzzling Divergence of Rents and User Costs, 1980-2004,"
422, U.S. Bureau of Labor Statistics.
- Randal Verbrugge, 2008. "The Puzzling Divergence Of Rents And User Costs, 1980-2004," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(4), pages 671-699, December.
- Smeeding, Timothy M & Weinberg, Daniel H, 2001. "Toward a Uniform Definition of Household Income," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(1), pages 1-24, March.
- Cowell, F.A., 2000.
"Measurement of inequality,"
Handbook of Income Distribution,
in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 2, pages 87-166
- Jonathan D. Fisher & David S. Johnson & Joseph T. Marchand & Timothy M. Smeeding & Barbara Boyle Torrey, 2007.
"No Place Like Home: Older Adults and Their Housing,"
Journals of Gerontology: Series B,
Gerontological Society of America, vol. 62(2), pages 120-128.
- Timothy Smeeding & Barbara Boyle Torrey & Jonathon Fisher & David S. Johnson & Joseph Marchand, 2006. "No Place Like Home: Older Adults and Their Housing," Working Papers, Center for Retirement Research at Boston College wp2006-16, Center for Retirement Research.
- Antonia Diaz & Maria Jose Luengo Prado, 2008.
"On the User Cost and Homeownership,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 11(3), pages 584-613, July.
- Peter Saunders & Peter Siminski, 2005. "Home Ownership And Inequality: Imputed Rent And Income Distribution In Australia," Economic Papers, The Economic Society of Australia, vol. 24(4), pages 346-367, December.
- Frick Joachim R. & Grabka Markus M., 2001. "Der Einfluß von Imputed Rent auf die personelle Einkommensverteilung. The Impact of Imputed Rent on the Personal Distribution of Income," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 221(3), pages 285-308, June.
- Joachim R. Frick & Jan Goebel & Markus M. Grabka, 2007. "Assessing the Distributional Impact of "Imputed Rent" and "Non-cash Employee Income" in Microdata: Case Studies Based on EU-SILC (2004) and SOEP (2002)," SOEPpapers on Multidisciplinary Panel Data Research 2, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Jonathan D. Fisher & David S. Johnson & Joseph T. Marchand & Timothy M. Smeeding & Barbara B. Torrey, 2009.
"Identifying the Poorest Older Americans,"
Journals of Gerontology: Series B,
Gerontological Society of America, vol. 64(6), pages 758-766.
- Walter Sosa Escudero & Leonardo Gasparini, 2003.
"Implicit Rents from Own-Housing and Income Distribution. Econometric Estimates for Greater Buenos Aires,"
58, Universidad de San Andres, Departamento de Economia, revised May 2004.
- 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.
- Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
- Yates, Judith, 1994. "Imputed Rent and Income Distribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 40(1), pages 43-66, March.
- Jorge Onrubia & M. Carmen Rodado & Luis Ayala, 2009.
"How do services of owner-occupied housing affect income inequality and redistribution?,"
112, ECINEQ, Society for the Study of Economic Inequality.
- Onrubia, Jorge & Rodado, M. Carmen & Ayala, Luis, 2009. "How do services of owner-occupied housing affect income inequality and redistribution?," Journal of Housing Economics, Elsevier, vol. 18(3), pages 224-232, September.
- Katherine A. Kiel & Jeffrey E. Zabel, 1999. "The Accuracy of Owner-Provided House Values: The 1978-1991 American Housing Survey," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(2), pages 263-298.
- Garner, Thesia I. & Short, Kathleen, 2009. "Accounting for owner-occupied dwelling services: Aggregates and distributions," Journal of Housing Economics, Elsevier, vol. 18(3), pages 233-248, September.
- Torrey, Barbara Boyle & Smeeding, Timothy M & Bailey, Debra, 1999. "Income Transitions in Central European Households," Economic Development and Cultural Change, University of Chicago Press, vol. 47(2), pages 237-257, January.
- Buckley, Robert M & Gurenko, Eugene N, 1997. "Housing and Income Distribution in Russia: Zhivago's Legacy," World Bank Research Observer, World Bank Group, vol. 12(1), pages 19-32, February.
- Todd Sinai & Nicholas S. Souleles, 2005.
"Owner-occupied housing as a hedge against rent risk,"
05-10, Federal Reserve Bank of Philadelphia.
- Todd Sinai & Nicholas S. Souleles, 2005. "Owner-Occupied Housing as a Hedge Against Rent Risk," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 763-789.
- Todd Sinai & Nicholas S. Souleles, 2003. "Owner-Occupied Housing as a Hedge Against Rent Risk," NBER Working Papers 9462, National Bureau of Economic Research, Inc.
- Atkinson, Tony & Cantillon, Bea & Marlier, Eric & Nolan, Brian, 2002. "Social Indicators: The EU and Social Inclusion," OUP Catalogue, Oxford University Press, number 9780199253494, December.
- Smeeding, Timothy M, et al, 1993. "Poverty, Inequality, and Family Living Standards Impacts across Seven Nations: The Effect of Noncash Subsidies for Health, Education and Housing," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(3), pages 229-56, September.
- Alari Paulus & Holly Sutherland & Panos Tsakloglou, 2010. "The distributional impact of in-kind public benefits in European countries," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(2), pages 243-266.
- Paulus, Alari & Sutherland, Holly & Tsakloglou, Panos, 2009.
"The Distributional Impact of In Kind Public Benefits in European Countries,"
IZA Discussion Papers
4581, Institute for the Study of Labor (IZA).
- Paulus, Alari & Sutherland, Holly & Tsakloglou, Panos, 2009. "The distributional impact of in kind public benefits in European countries," EUROMOD Working Papers EM10/09, EUROMOD at the Institute for Social and Economic Research.
- Dougherty, Ann & Van Order, Robert, 1982. "Inflation, Housing Costs, and the Consumer Price Index," American Economic Review, American Economic Association, vol. 72(1), pages 154-164, March.
- Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
When requesting a correction, please mention this item's handle: RePEc:zbw:espost:67388. 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: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.