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Incentives for dwelling renovations: evidence from a large fiscal programme

Author

Listed:
  • Antonio Accetturo

    (Bank of Italy)

  • Elisabetta Olivieri

    (Bank of Italy)

  • Fabrizio Renzi

    (Bank of Italy)

Abstract

We analyse the economic impact of two tax credits ('Bonus Facciate'/facades bonus and 'Superbonus 110%'), active from the second half of 2020, which resulted in an expenditure of more than €170 billion in 2021-23 (about 3 per cent of GDP per year). The programmes aimed at improving the aesthetics, energy efficiency, and earthquake resistance of residential dwellings. Using the synthetic control method, we find that more than €45 billion represents a 'deadweight loss', as one fourth of the spending related to subsidized investments would have been carried out even absent the incentives. Given this result, we find that the fiscal multiplier is slightly below one, a figure lower than the ones associated with public investments in standard macroeconomic models or estimated for green investments. Using Input-Output tables, we compute that the incentives accounted for roughly three quarters of growth in value added in the construction sector between 2020 and 2023, but they played a rather limited role in other sectors.

Suggested Citation

  • Antonio Accetturo & Elisabetta Olivieri & Fabrizio Renzi, 2024. "Incentives for dwelling renovations: evidence from a large fiscal programme," Questioni di Economia e Finanza (Occasional Papers) 860, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_860_24
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    More about this item

    Keywords

    programme evaluation; synthetic control method; dwelling investments; input-output tables;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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