Does Favorable Tax-Treatment of Housing Reduce Equipment Investment? / Ben Broadbent, Michael Kremer.

Format:

Book

Author/Creator:

Broadbent, Ben.

Contributor:

National Bureau of Economic Research.

Kremer, Michael.

Series:

Working Paper Series (National Bureau of Economic Research) no. w6161.

NBER working paper series no. w6161

Language:

English

Subjects (All):

Urban homesteading.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1997.

Cambridge, Mass. : National Bureau of Economic Research, 1997.

Summary:

It is often argued that low tax rates on owner-occupied housing divert investment from equipment. This paper demonstrates that if people are heterogeneous in their propensity to save, and if there are constraints on borrowing, favorable tax treatment of owner-occupied housing up to a certain value increases equipment investment. This is because low housing taxes encourage renters to become owner-occupiers, and this leads existing owner-occupiers to shift their portfolio of other assets from rental housing to equipment.

Notes:

Print version record

September 1997.

Includes bibliographical references.