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The Cost-Effectiveness of Alternative Methods of Delivering Housing Subsidies

  • Edgar O. Olsen


The empirical literature is unanimous in finding that tenant-based housing certificates and vouchers provide housing of any quality at a much lower total cost (that is, cost to all levels of government and tenants) than the types of project-based assistance studied, namely Public Housing, Section 236, and Section 8 New Construction and Substantial Rehab. However, these studies are so old and inaccessible that they are unknown to most people involved in current discussions of housing policy. This paper discusses the theoretical reasons to expect that these types of project-based housing programs will have excessive costs, presents a conceptually correct methodology for the cost-effectiveness analysis of housing programs, and provides a description and critical appraisal of the data and methods used in these earlier studies as well as a summary of their results. It concludes that cost-effectiveness analyses of current forms of projectbased housing assistance should be the highest priority for research on housing policy.

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Paper provided by University of Virginia, Department of Economics in its series Virginia Economics Online Papers with number 351.

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Length: 33 pages
Date of creation: Dec 2000
Date of revision:
Handle: RePEc:vir:virpap:351
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  1. Mayo, Stephen K., 1986. "Sources of inefficiency in subsidized housing programs: A comparison of U.S. and German experience," Journal of Urban Economics, Elsevier, vol. 20(2), pages 229-249, September.
  2. Olsen, Edgar O. & Barton, David M., 1983. "The benefits and costs of public housing in New York City," Journal of Public Economics, Elsevier, vol. 20(3), pages 299-332, April.
  3. Daniel H. Weinberg, 1982. "Housing Benefits From the Section 8 Housing Program," Evaluation Review, , vol. 6(1), pages 5-24, February.
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