The General Equilibrium Effects of Inflation on Housing Consumption and Investment / James Berkovec, Don Fullerton.

Format:

Book

Author/Creator:

Berkovec, James Arthur

Contributor:

Fullerton, Don.

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w2826.

NBER working paper series no. w2826

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1989.

Summary:

In a mean-variance portfolio choice model, each of 3,578 households from the 1983 Survey of Consumer Finances has calculated preferences over housing, other consumption, and risk. Each household is constrained such that any owner-occupied housing in portfolio must match housing services consumed. Corporate taxes are modeled in some detail, and regression coefficients are used to estimate the adjusted gross income, itemizable deductions, and statutory marginal tax rate of each household. General equilibrium simulation results indicate that inflation does not necessarily increase total owner housing. Top-bracket households increase their owner housing, while others switch into bonds. The greater number of households in low-brackets implies that the homeownership rate can fall even if the amount of owner housing rises.

Notes:

1989.

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