Abstract
Housing transfer taxes are fiscally important in many countries despite evidence of substantial welfare costs. We argue that the welfare costs are larger than previously thought because previous studies ignore spillovers between treatment and control groups. We analyze the effect of transfer taxes on household mobility using a quasi-experiment arising from a tax reform. To account for spillovers between treatment and control groups, we use a housing market model calibrated to match the mobility rates in our micro data and our quasi-experimental mobility effect estimate. Ignoring the spillovers leads to a 20% underestimation of the negative mobility effect.
Original language | English |
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Article number | 103367 |
Number of pages | 11 |
Journal | JOURNAL OF URBAN ECONOMICS |
Volume | 124 |
Early online date | 17 Jun 2021 |
DOIs | |
Publication status | Published - Jul 2021 |
MoE publication type | A1 Journal article-refereed |
Keywords
- Household mobility
- spillover
- transfer tax
- welfare cost