Imputed rent and distributional effects of housing-related policies in Estonia, Italy and the United Kingdom

Housing policies are a complex set of taxes, benefits and incentives. This paper evaluates the redistributive effect of a comprehensive set of housing-related policies, taking into account the housing advantage of homeowners and social tenants. We use the Euromod microsimulation model to simulate ho...

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Bibliographic Details
Published inBaltic journal of economics Vol. 13; no. 2; pp. 35 - 58
Main Author Maestri, Virginia
Format Journal Article
LanguageEnglish
Published 01.10.2013
Subjects
Estonia
Housing allowances
Housing expenditure
Housing market
Housing policy
Income inequality
Income redistribution
Italy
Relative deprivation
Rent
United Kingdom
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Summary:Housing policies are a complex set of taxes, benefits and incentives. This paper evaluates the redistributive effect of a comprehensive set of housing-related policies, taking into account the housing advantage of homeowners and social tenants. We use the Euromod microsimulation model to simulate housing policies in Estonia, Italy and the United Kingdom. Disentangling the contribution to inequality and poverty of each housing-related policy, we find that the current design of property taxes is not progressive and that other housing policies have a limited impact on inequality in Estonia and on both inequality and relative poverty in Italy. Only in the UK are housing policies more important than imputed rent in reducing inequality and poverty. In all three countries, housing-related policies favor the elderly. Although the United Kingdom has the most effective system of housing policies, Estonia seems to have the most efficient one.
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ISSN:1406-099X