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The incidence of UK housing benefit: evidence from the 1990s reforms

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  • Gibbons, Stephen
  • Manning, Alan

Abstract

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.

Suggested Citation

  • Gibbons, Stephen & Manning, Alan, 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.
  • Handle: RePEc:ehl:lserod:20011
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    References listed on IDEAS

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    1. Gibbons, Stephen & Manning, Alan, 2006. "The incidence of UK housing benefit: Evidence from the 1990s reforms," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 799-822, May.
    2. 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 1270-1292, December.
    3. Todd Sinai & Joel Waldfogel, "undated". "Do Low Income Housing Subsidies Increase Housing Consumption?," Zell/Lurie Center Working Papers 394, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
    4. Edgar O. Olsen, 2003. "Housing Programs for Low-Income Households," NBER Chapters,in: Means-Tested Transfer Programs in the United States, pages 365-442 National Bureau of Economic Research, Inc.
    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 ? [L’incidence des aides au logement en France (1973-2002)]," Économie et Statistique, Programme National Persée, vol. 381(1), pages 17-40.
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    Citations

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    Cited by:

    1. Didier Baudewyns & Robert Plasman, 2004. "Analyse exploratoire d'un programme d'allocations-loyers en Région de Bruxelles-Capitale: comparaison internationale et évaluation budgétaire et économique selon trois scénarios," ULB Institutional Repository 2013/9181, ULB -- Universite Libre de Bruxelles.
    2. Gibbons, Stephen & Manning, Alan, 2006. "The incidence of UK housing benefit: Evidence from the 1990s reforms," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 799-822, May.
    3. Aki Kangasharju, 2010. "Housing Allowance and the Rent of Low-income Households," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(3), pages 595-617, September.
    4. Desai, Mihir & Dharmapala, Dhammika & Singhal, Monica, 2008. "Investable Tax Credits: The Case of the Low Income Housing Tax Credit," Working Paper Series rwp08-035, Harvard University, John F. Kennedy School of Government.
    5. Johannes Abeler & Felix Marklein, 2017. "Fungibility, Labels, and Consumption," Journal of the European Economic Association, European Economic Association, vol. 15(1), pages 99-127.
    6. Fack, Gabrielle, 2006. "Are housing benefit an effective way to redistribute income? Evidence from a natural experiment in France," Labour Economics, Elsevier, vol. 13(6), pages 747-771, December.
    7. Segú, Mariona & Vignolles, Benjamin, 2018. "Taxing Vacant Dwellings: Can fiscal policy reduce vacancy?," MPRA Paper 85508, University Library of Munich, Germany.
    8. Mariona Segú & Benjamin Vignolles, 2016. "Taxing Vacant Apartments: Can fiscal policy reduce vacancy?," Working Papers 2016.02, International Network for Economic Research - INFER.
    9. Essi Eerola & Tuukka Saarimaa, 2017. "Delivering Affordable Housing and Neighborhood Quality: A Comparison of Place- and Tenant-Based Programs," CESifo Working Paper Series 6674, CESifo Group Munich.
    10. Mihir Desai & Dhammika Dharmapala & Monica Singhal, 2010. "Tax Incentives for Affordable Housing: The Low Income Housing Tax Credit," NBER Chapters,in: Tax Policy and the Economy, Volume 24, pages 181-205 National Bureau of Economic Research, Inc.
    11. Andrew Hanson, 2012. "The Incidence of the Mortgage Interest Deduction: Evidence from the Market for Home Purchase Loans," Public Finance Review, , vol. 40(3), pages 339-359, May.
    12. Van Ommeren, Jos & Koopman, Marnix, 2011. "Public housing and the value of apartment quality to households," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 207-213, May.
    13. Essi Eerola & Teemu Lyytikäinen, 2017. "Housing Allowance and Rents: Evidence from a Stepwise Subsidy Scheme," SERC Discussion Papers 0220, Spatial Economics Research Centre, LSE.
    14. Dean Hyslop & David Rea, 2018. "Do housing allowances increase rents? Evidence from a discrete policy change," Working Papers 18_10, Motu Economic and Public Policy Research.
    15. Michael D. Eriksen & Amanda Ross, 2015. "Housing Vouchers and the Price of Rental Housing," American Economic Journal: Economic Policy, American Economic Association, vol. 7(3), pages 154-176, August.
    16. Van Ommeren, Jos & Graaf-de Zijl, Marloes, 2013. "Estimating household demand for housing attributes in rent-controlled markets," Journal of Housing Economics, Elsevier, vol. 22(1), pages 11-19.
    17. Olsen, Edgar O. & Zabel, Jeffrey E., 2015. "US Housing Policy," Handbook of Regional and Urban Economics, Elsevier.

    More about this item

    Keywords

    Housing Subsidies; Tax Incidence;

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence

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