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Public housing units vs. housing vouchers: accessibility, local public goods, and welfare

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  • Leung, Charles Ka Yui
  • Sarpca, Sinan
  • Yilmaz, Kuzey

Abstract

We develop a general equilibrium model of residential choice and study the effects of two housing aid policies, public housing units and housing vouchers. Land is differentiated by both residential accessibility and local public goods, and the provision levels of local public goods are determined by property tax revenues and neighborhood compositions. Households differ in their incomes and preferences for local public goods. Housing aid policies are financed by general income taxes. We discuss how the location of public housing units is a fundamental policy variable, in addition to the numbers and sizes of units, and argue that vouchers not only cause less distortion for social welfare compared to public housing, but may also improve overall welfare.

Suggested Citation

  • Leung, Charles Ka Yui & Sarpca, Sinan & Yilmaz, Kuzey, 2012. "Public housing units vs. housing vouchers: accessibility, local public goods, and welfare," MPRA Paper 40990, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:40990
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    Cited by:

    1. Charles Ka Yui Leung & Joe Cho Yiu Ng, 2018. "Macro Aspects of Housing," GRU Working Paper Series GRU_2018_016, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    2. Amitrajeet A. Batabyal & Peter Nijkamp, 2020. "Workplace choice, commuting costs, and wage taxation in urban and adjacent rural regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(3), pages 775-786, December.
    3. Leung, Tin Cheuk & Tsang, Kwok Ping, 2012. "Love thy neighbor: Income distribution and housing preferences," Journal of Housing Economics, Elsevier, vol. 21(4), pages 322-335.
    4. Weimin Yan & Benhong Peng & Guo Wei & Anxia Wan, 2021. "Is There Coupling Effect between Financial Support and Improvement of Human Settlement? A Case Study of the Middle and Lower Regions of the Yangtze River, China," Sustainability, MDPI, vol. 13(15), pages 1-16, July.
    5. Charles Ka Yui Leung & Joe Cho Yiu Ng & Edward Tang, 2020. "Why is the Hong Kong Housing Market Unaffordable? Some Stylized Facts and Estimations," Globalization Institute Working Papers 380, Federal Reserve Bank of Dallas.
    6. Charles Ka Yui LEUNG, 2022. "Housing and Macroeconomics," ISER Discussion Paper 1197, Institute of Social and Economic Research, Osaka University.
    7. Ning Zhang, 2022. "In-kind housing transfers and labor supply: a structural approach," Economics Series Working Papers 992, University of Oxford, Department of Economics.
    8. Chen, Jie & Nong, Huifu, 2016. "The heterogeneity of market supply effects of public housing provision: Empirical evidence from China," Journal of Housing Economics, Elsevier, vol. 33(C), pages 115-127.
    9. Benoît Schmutz, 2012. "Public Housing Quotas and Segregation," AMSE Working Papers 1228, Aix-Marseille School of Economics, France.
    10. Charles Ka Yui Leung, 2015. "Availability, Affordability and Volatility: The Case of the Hong Kong Housing Market," International Real Estate Review, Global Social Science Institute, vol. 18(3), pages 383-428.
    11. Kuzey Yılmaz & Muharrem Yeşilırmak, 2023. "Access to transportation, residential segregation, and economic opportunity," Contemporary Economic Policy, Western Economic Association International, vol. 41(1), pages 103-127, January.
    12. Gong, Yifan & Leung, Charles Ka Yui, 2020. "When education policy and housing policy interact: Can they correct for the externalities?," Journal of Housing Economics, Elsevier, vol. 50(C).
    13. Reina, Vincent & Begley, Jaclene, 2014. "Reprint of “Will They Stay or Will They Go: Predicting Subsidized Housing Opt-Outs”," Journal of Housing Economics, Elsevier, vol. 24(C), pages 122-137.
    14. Hanushek Eric A & Sarpça Sinan & Yilmaz Kuzey, 2011. "Private Schools and Residential Choices: Accessibility, Mobility, and Welfare," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-34, August.
    15. Eerola, Essi & Saarimaa, Tuukka, 2018. "Delivering affordable housing and neighborhood quality: A comparison of place- and tenant-based programs," Journal of Housing Economics, Elsevier, vol. 42(C), pages 44-54.
    16. Xiang Cai & Chin-Chang Tsai & Wei-Ning Wu, 2017. "Are They Neck and Neck in the Affordable Housing Policies? A Cross Case Comparison of Three Metropolitan Cities in China," Sustainability, MDPI, vol. 9(4), pages 1-16, April.
    17. Reina, Vincent & Begley, Jaclene, 2014. "Will they stay or will they go: Predicting subsidized housing opt-outs," Journal of Housing Economics, Elsevier, vol. 23(C), pages 1-16.
    18. Benoît Schmutz, 2015. "Spatial sorting of African Immigrants in the French Public Housing Market," The Review of Black Political Economy, Springer;National Economic Association, vol. 42(3), pages 247-270, September.
    19. Suzuki, Masatomo & Hino, Kimihiro & Muto, Sachio, 2022. "Negative externalities of long-term vacant homes: Evidence from Japan," Journal of Housing Economics, Elsevier, vol. 57(C).
    20. Dalmazzo, Alberto & de Blasio, Guido & Poy, Samuele, 2022. "Can Public Housing Trigger Industrialization?," Journal of Housing Economics, Elsevier, vol. 57(C).
    21. Shanggang Yin & Zhifei Ma & Weixuan Song & Chunhui Liu, 2019. "Spatial Justice of a Chinese Metropolis: A Perspective on Housing Price-to-Income Ratios in Nanjing, China," Sustainability, MDPI, vol. 11(6), pages 1-15, March.
    22. Asunción Blanco-Romero & Macià Blázquez-Salom & Gemma Cànoves, 2018. "Barcelona, Housing Rent Bubble in a Tourist City. Social Responses and Local Policies," Sustainability, MDPI, vol. 10(6), pages 1-18, June.

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    More about this item

    Keywords

    Public housing; housing vouchers; housing policy; welfare; residential location choice; local public goods; endogenous sorting;
    All these keywords.

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General

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