IDEAS home Printed from https://ideas.repec.org/a/sae/urbstu/v37y2000i1p181-194.html
   My bibliography  Save this article

Discretionary Profit in Subsidised Housing Markets

Author

Listed:
  • Andries Nentjes

    (Faculteit der Rechtsgeleerdheid, University of Groningen, Westerhaven 16A, Postbus 716, 9700 AS Groningen, The Netherlands, A.Nentjes@rechten.rug.nl)

  • Wolfgang Schopp

    (International Institute for Applied Systems Analysis, A-2361 Laxenburg, Austria, schoepp@iiasa.ac.at)

Abstract

In the subsidised housing sector, building corporations can use their market power as purchasers to raise output of subsidised housing to a level higher than it is with perfect competition on both sides of the market. This holds true if the building society is perfectly X-efficient. The proposition is not necessarily true if the corporation maximises a utility function in which discretionary profit, or organisational slack, is an argument. The X-inefficient building society may set output higher or lower than with perfect competition. If the government grants a fixed subsidy per house and tries to constrain X-inefficiency by imposing a maximum price, this might be an incentive for the building corporation to maintain a planned shortage of subsidised houses. However, housing shortages will be smaller and welfare possibly greater than it is with perfect competition. The existence of a perfectly competitive non-subsidised housing sector is for the building corporation an incentive to increase strategically the output of subsidised housing and reduce planned shortages; but it does not necessarily eliminate such shortages.

Suggested Citation

  • Andries Nentjes & Wolfgang Schopp, 2000. "Discretionary Profit in Subsidised Housing Markets," Urban Studies, Urban Studies Journal Limited, vol. 37(1), pages 181-194, January.
  • Handle: RePEc:sae:urbstu:v:37:y:2000:i:1:p:181-194
    DOI: 10.1080/0042098002357
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1080/0042098002357
    Download Restriction: no

    File URL: https://libkey.io/10.1080/0042098002357?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Estelle James, 1978. "Product Mix and Cost Disaggregation: A Reinterpretation of the Economics of Higher Education," Journal of Human Resources, University of Wisconsin Press, vol. 13(2), pages 157-186.
    2. Rose-Ackerman, Susan, 1987. "Ideals versus Dollars: Donors, Charity Managers, and Government Grants," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 810-823, August.
    3. Jerald SCHIFF & Burton WEISBROD, 1991. "Competition Between For-Profit And Nonprofit Organizations In Commercial Markets," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 62(4), pages 619-640, October.
    4. Niskanen, William A, 1975. "Bureaucrats and Politicians," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 617-643, December.
    5. Duizendstraal, A & Nentjes, A, 1994. "Migue and Belanger on Managerial Discretion: A Note," Public Choice, Springer, vol. 81(1-2), pages 191-193, October.
    6. Armen A. Aichian & Reuben A. Kessel, 1962. "Competition, Monopoly, and the Pursuit of Pecuniary Gain," NBER Chapters, in: Aspects of Labor Economics, pages 157-183, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Roelof de Jong & Andries Nentjes & Doede Wiersma, 2000. "Inefficiencies in Public Environmental Services," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(1), pages 69-79, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jérǒme BALLET, 1994. "L'Entreprise À Vocation Sociale," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 65(4), pages 623-640, October.
    2. Connolly, Laura S., 1997. "Does external funding of academic research crowd out institutional support?," Journal of Public Economics, Elsevier, vol. 64(3), pages 389-406, June.
    3. Bruno Bises, 2000. "Exemption or Taxation for Profits of Non-Profits? An Answer from a Model Incorporating Managerial Discretion," Public Choice, Springer, vol. 104(1), pages 19-39, July.
    4. Estelle James & Egon Neuberger, 1981. "The university department as a non-profit labor cooperative," Public Choice, Springer, vol. 36(3), pages 585-612, January.
    5. Christoph Starke, 2012. "Serving the many or serving the most needy?," Economics of Governance, Springer, vol. 13(4), pages 365-386, December.
    6. Christoph Starke, 2010. "Serving the Many or Serving the Most Needy?," FEMM Working Papers 100002, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    7. Carlo Borzaga & Ermanno Tortia, 2004. "Worker involvement in entrepreneurial nonprofit organizations. Toward a new assessment of workers' perceived satisfaction and fairness," Department of Economics Working Papers 0409, Department of Economics, University of Trento, Italia.
    8. François Facchini, 1993. "Pour une critique du modèle technocratique -savoir-marché politique et production de la loi," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01350618, HAL.
    9. Deller, Steven C. & Hinds, David G. & Hinman, Donald L., 2001. "Local Public Services In Wisconsin: Alternatives For Municipalities With A Focus On Privatization," Staff Papers 12658, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    10. Luciano Fanti & Domenico Buccella, 2017. "Corporate social responsibility in a game-theoretic context," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 44(3), pages 371-390, September.
    11. Gordon C. Winston, 1997. "Why Can't a College be More Like a Firm?," Williams Project on the Economics of Higher Education DP-42, Department of Economics, Williams College.
    12. Poledrini Simone & Searing Elizabeth A. M. & Montrone Alessandro, 2022. "A Model for Directing and Modulating Public Interventions in Social Enterprises," Nonprofit Policy Forum, De Gruyter, vol. 13(4), pages 307-332, October.
    13. Gordon C. Winston & Yen, I.C., 1995. "Costs, Prices, Subsidies, and Aid in U.S. Higher Education," Williams Project on the Economics of Higher Education DP-32, Department of Economics, Williams College.
    14. Vernon Ruttan, 1980. "Bureaucratic productivity: The case of agricultural research," Public Choice, Springer, vol. 35(5), pages 529-547, January.
    15. repec:eee:labchp:v:3:y:1999:i:pc:p:3573-3630 is not listed on IDEAS
    16. Pradeep Kautish, 2010. "Study On Impact Of Environmental Change On Selected Public Sector Enterprises In India," Romanian Economic Business Review, Romanian-American University, vol. 5(2), pages 68-88, June.
    17. Katia Melnik & Jean-Benoît Zimmermann, 2008. "An Economic Approach To Voluntary Association," Working Papers halshs-00347448, HAL.
    18. Randall Holcombe, 2005. "Government growth in the twenty-first century," Public Choice, Springer, vol. 124(1), pages 95-114, July.
    19. Gordon Winston & David Zimmerman, 2004. "Peer Effects in Higher Education," NBER Chapters, in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 395-424, National Bureau of Economic Research, Inc.
    20. Ando, Amy, 1998. "Delay on the Path to the Endangered Species List: Do Costs and Benefits Matter," RFF Working Paper Series dp-97-43-rev, Resources for the Future.
    21. Karen Maguire, 2013. "Drill Baby Drill? Political and Market Influences on Federal Onshore Oil and Gas Leasing in the Western United States," Economics Working Paper Series 1401, Oklahoma State University, Department of Economics and Legal Studies in Business, revised Apr 2013.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:urbstu:v:37:y:2000:i:1:p:181-194. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.gla.ac.uk/departments/urbanstudiesjournal .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.