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The Incidence of UK Housing Benefit: Evidence from the 1990s Reforms

  • Steve Gibbons
  • Alan Manning

Housing Benefit (HB) in the UK subsidizes the rent of tenants in both the private and public sectors. Its share in total welfare benefits has risen markedly through time and there is widespread dissatisfaction with it. But, reform has been very slow. One important issue is the extent to which the incidence of HB is actually on the tenants. Exploiting two data sets from the mid-1990s when the subsidy regime changed for some tenants but not for others, this paper explores the incidence. We find that some of the incidence is on landlords though our two data sets differ in the extent to which this is true. We also find evidence in support of a ¿matching¿ model of the rental market rather tha n a perfectly competitive one.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0597.

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Date of creation: Dec 2003
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Handle: RePEc:cep:cepdps:dp0597
Contact details of provider: Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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  1. Stephen Gibbons & Alan Manning, 2003. "The incidence of UK housing benefit: evidence from the 1990s reforms," LSE Research Online Documents on Economics 20011, London School of Economics and Political Science, LSE Library.
  2. Todd Sinai & Joel Waldfogel, 2002. "Do Low-Income Housing Subsidies Increase Housing Consumption?," NBER Working Papers 8709, National Bureau of Economic Research, Inc.
  3. Edgar O. Olsen, 2001. "Housing Programs for Low-Income Households," NBER Working Papers 8208, National Bureau of Economic Research, Inc.
  4. Wheaton, William C, 1990. "Vacancy, Search, and Prices in a Housing Market Matching Model," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1270-92, December.
  5. Susin, Scott, 2002. "Rent vouchers and the price of low-income housing," Journal of Public Economics, Elsevier, vol. 83(1), pages 109-152, January.
  6. Gabrielle Fack, 2005. "Pourquoi les ménages pauvres paient-ils des loyers de plus en plus élevés ?," Économie et Statistique, Programme National Persée, vol. 381(1), pages 17-40.
  7. Steve Gibbons & Alan Manning, 2003. "The Incidence of UK Housing Benefit: Evidence from the 1990s Reforms," CEP Discussion Papers dp0597, Centre for Economic Performance, LSE.
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