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The Economics of Homelessness: The Evidence from North America

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  • Quigley, John M.
  • Raphael, Steven

Abstract

It is generally believed that the increased incidence of homelessness in the US has arisen from broad societal factors – changes in the institutionalization of the mentally ill, increases in drug addiction and alcohol usage, etc. This paper reports on a comprehensive test of the alternate hypothesis that variations in homelessness arise from changed circumstances in the housing market and in the income distribution. We utilize essentially all the systematic information available on homelessness in US urban areas – census counts, shelter bed counts, records of transfer payments, and administrative agency estimates. We use these data to estimate the effects of housing prices, vacancies, and rent-to-income ratios upon the incidence of homelessness. Our results suggest that simple economic principles governing the availability and pricing of housing and the growth in demand for the lowest quality housing explain a large portion of the variation in homelessness among US metropolitan housing markets. Furthermore, rather modest improvements in the affordability of rental housing or its availability can substantially reduce the incidence of homelessness in the US.

Suggested Citation

  • Quigley, John M. & Raphael, Steven, 2002. "The Economics of Homelessness: The Evidence from North America," Berkeley Program on Housing and Urban Policy, Working Paper Series qt2dw8b4r3, Berkeley Program on Housing and Urban Policy.
  • Handle: RePEc:cdl:bphupl:qt2dw8b4r3
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    References listed on IDEAS

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    1. John M. Quigley & Steven Raphael & Eugene Smolensky, 2001. "Homeless In America, Homeless In California," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 37-51, February.
    2. Steven D. Levitt, 1996. "The Effect of Prison Population Size on Crime Rates: Evidence from Prison Overcrowding Litigation," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 319-351.
    3. Joel A. Devine & James D. Wright, 1992. "Counting the Homeless," Evaluation Review, , vol. 16(4), pages 409-417, August.
    4. James D. Wright & Joel A. Devine, 1992. "Counting the Homeless," Evaluation Review, , vol. 16(4), pages 355-364, August.
    5. Honig, Marjorie & Filer, Randall K, 1993. "Causes of Intercity Variation in Homelessness," American Economic Review, American Economic Association, vol. 83(1), pages 248-255, March.
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    Cited by:

    1. Diette, Timothy M. & Ribar, David C., 2015. "A Longitudinal Analysis of Violence and Housing Insecurity," IZA Discussion Papers 9452, Institute for the Study of Labor (IZA).
    2. Jarvis, Justin, 2015. "Individual determinants of homelessness: A descriptive approach," Journal of Housing Economics, Elsevier, vol. 30(C), pages 23-32.
    3. Quigley, John M. & Raphael, Steven & Smolensky, Eugene, 2001. "Homelessness in California," Berkeley Program on Housing and Urban Policy, Working Paper Series qt2pg3f4ns, Berkeley Program on Housing and Urban Policy.

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