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Purpose This paper aims to document the economic importance of the housing sector, as measured by its contribution to gross domestic product (GDP), which is not fully recognized. In response to the joint economic and health crises caused by the COVID-19 pandemic, there is an opportunity for emerging market countries to develop and implement inclusive housing strategies that stimulate the economy and improve community health outcomes. However, so far housing does not feature prominently in the recovery plans of many emerging market countries. Design/methodology/approach This paper uses national account data and informal housing estimates for 11 emerging market economies to estimate the contribution of housing investments and housing services to the GDP of these countries. Findings This paper finds that the combined contribution of housing investments and housing services represents between 6.9% and 18.5% of GDP, averaging 13.1% in the countries with information about both. This puts the housing sector roughly on par with other key sectors such as manufacturing. In addition, if the informal housing sector is undercounted in the official national account figures used in this analysis by 50% or 100%, for example, then the true averages of housing investments and housing services’ contribution to GDP would increase to 14.3% or 16.1% of GDP, respectively. Research limitations/implications Further efforts to improve data collection about housing investments and consumption, particularly imputed rent for owner occupiers and informal activity require national government to conduct regular household and housing surveys. Researcher can help make these surveys more robust and leverage new data sources such as scraped housing price and rent data to complement traditional surveys. Better data are needed in order to capture housing contribution to the economy. Practical implications The size of the housing sector and its impact in terms of employment and community resilience indicate the potential of inclusive housing investments to both serve short-term economic stimulus and increase long-term community resilience. Originality/value The role of housing in the economy is often limited to housing investment, despite the importance of housing services and well-documented methodologies to include them. This analysis highlights the importance of housing to the economy of emerging market countries (in addition to all the non-GDP related impact of housing on welfare) and indicate data limitation that need to be addressed to further strengthen the case for focusing on housing as part of economic recovery plans.

金沢大学人間社会研究域経済学経営学系, 本研究の目的は、戸建て住宅の品質を説明する要因を特定した後に、現行の帰属家賃の推定方法とは別の手法を提示することである。現行の帰属家賃は、賃貸住宅の家賃から推計されるため、住宅の質の違いを理解し、是正することが重要な課題である。そのため、ヘドニックプライスモデルを使用して家賃に影響を与える要因を特定し、現在使用されている推計方法と比較した。その結果から、分析エリアの細分化と都市計画や住宅の質を組み込む必要性を検証した。, The purpose of this study is to determine the factors that explain the quality of detached houses and present another estimation method for the imputed rent. It is important to understand and rectify the difference of quality in owned and rental houses, as the imputed rent of homeownership is estimated from the rent price. Therefore, we used a hedonic price model to identify the factors that influence rent and compared it with the current estimation method used. From the results, we verified the need to incorporate the subdivision of the analysis area and the quality of city planning and housing., 出版者の許可を得て登録

金沢大学人間社会研究域経済学経営学系, 出版者および共著者の許可を得て登録, 査読済み論文

This article analyses the development of inequalities across ages and generations in France using a pseudo-panel developed from the successive waves of the French Household Expenditure Survey that took place between 1979 and 2011. The standard of living of individuals, evaluated using individualized disposable income or private consumption, including housing expenditure and imputed rent, is decomposed by sex and educational attainment. The estimation of Age-Period-Cohort models reveal that men with lower education attainments who were born after 1950 experienced a significant decline in disposable income with respect to those who were born between 1918 and 1950. Conversely, when the whole population of men is considered, no decline in disposable income is observed. The evolution is rather different for women: those with lower education attainments did not experienced any decline whereas the whole population of women benefitted from a strong increase in disposable income across generations.

This study investigates the impact of housing on financial adequacy of New Zealand retirees using the Survey of Family, Income, and Employment (SoFIE) data for the period 2002–2009. We exam...

The measure of a household's income should include not only monetary components but also non-monetary components and in-kind benefits, such as imputed rent. Imputed rent is the rent an owner can expect to receive were the house on the rental market. This study examined the impact of net imputed rent on the distribution of income in a spatial context. The spatial impact of net imputed rent, mortgage payments, private rent, public rent (social housing schemes) and reverse mortgage/annuity on the spatial distribution of disposable income was examined for the year 2011. A spatial microsimulation model, simulated model of the Irish local economy (SMILE), was used to simulated disposable income at a detailed spatial scale. Rental and property values are estimated at a spatial scale adopting the kriging methodology. The created rental and property data were merged into the SMILE simulated dataset to examine the impact of housing on the spatial distribution of disposable income at a small area level. Results show that the imputed cash flows from property ownership decreases the income share of those at the bottom of the income distribution and is inequality increasing, except in the case of those aged 65 +. Spatially the benefits of housing are greatest in urban areas where property values are highest. The small area measurements of imputed rent highlight the dis-equalising impact imputed rent and housing wealth has on inequality; the rich being able to consume more housing.

本研究の目的は、戸建て住宅の品質を説明する要因を特定した後に、現行の帰属家賃の推定方法とは別の手法を提示することである。現行の帰属家賃は、賃貸住宅の家賃から推計されるため、住宅の質の違いを理解し、是正することが重要な課題である。そのため、ヘドニックプライスモデルを使用して家賃に影響を与える要因を特定し、現在使用されている推計方法と比較した。その結果から、分析エリアの細分化と都市計画や住宅の質を組み込む必要性を検証した。, The purpose of this study is to determine the factors that explain the quality of detached houses and present another estimation method for the imputed rent. It is important to understand and rectify the difference of quality in owned and rental houses, as the imputed rent of homeownership is estimated from the rent price. Therefore, we used a hedonic price model to identify the factors that influence rent and compared it with the current estimation method used. From the results, we verified the need to incorporate the subdivision of the analysis area and the quality of city planning and housing.

Welfare is traditionally understood through social security decommodifying labor markets or social investment policies. In the domain of housing, however, welfare for homeowners is largely hidden in the tax codes’ fiscal exemptions. Based on a content analysis of legislation, this paper introduces a novel yearly database of 37 countries between 1910 and 2020 to uncover the “hidden welfare state” of taxes on imputed rent, deductibility of mortgage payments, housing capital gains tax and VAT on newly built dwellings. Summary indices of homeownership attractiveness and neutrality of the tax code show that fiscal homeownership policies have been in decline until the 1980s and risen ever since. They are in place where finance is liberally and labor restrictively regulated. Contrary to the classical welfare state, they are not associated with an economic logic of industrialism or left-wing governments, but a rent-regulation alternative of Common-Law jurisdictions and smaller countries. As welfare for property owners, the logic of fiscal homeownership welfare diverges from the classical welfare for the laboring classes.

This is the first paper that studies the effects of including non-monetary income from housing (imputed rent) in the measure of income on intergenerational income mobility. Using national panel data sets for Australia, the United States and Germany, it is shown that only Australian society becomes 22% less mobile as measured by an intergenerational rank correlation. This decrease is also confirmed using the intergenerational transition matrices. As a result, cross-regional comparisons of intergenerational income mobility may be misleading, especially using tax data as imputed rent is rarely taxed.

Housing price fluctuations exert effects on the economy through various channels. More precisely, however, relative prices between housing and other assets prices and goods/services prices are the variable that should be observed.

Empirically, in many developed countries, homeownership rises with age. Both housing wealth and financial wealth affect retirement adequacy. Focusing replacement rates based on pension incomes alone may detract from the full retirement adequacy picture, as homeowners do not pay rent and hence need less cash. This paper adopts a wider perspective of retirement adequacy and includes net imputed rents in the calculation of replacement rates to gauge retirement adequacy. Including net imputed rents in replacement rates calculation is particularly important for Singapore, given the prevalence of house ownership, made possible by the nexus between retirement and housing policies. Workers can use part of the monthly contributions to Singapore's central provident fund to finance housing. While this would tradeoff retirement savings, it boosts spendable income for home-owning retirees. It is found that incorporating net imputed rent in the computation of replacement rates boosts the replacement rates by 12 percentage points for a male median worker and by 15 percentage points for female median workers.

In this study, the role and characteristics of water-economic rent in the generation of ecological financial flows is shown. The potential of such payments is determined on the basis of comparison of the actual indicators with the imputed ones. The calculations of actual and imputed rent (for closing costs) for the branches of the economy and regions are carried out. The combination of these approaches makes it possible to see the current level of rental income and determine the prospects for their adjustment. In the regional context, the level of economic development influences the formation of rent. Those regions that have the highest rates of actual payments are the leaders and for the closing costs. To characterize the water management complex as a market participant, the indicators of fiscal return and investment return of water use are calculated. In contrast to expectations, in the regions, the most consumed water (due to population growth, industrial facilities), fiscal return is less. A greater fiscal impact of rental payments for water use is found in regions with lower levels of economic development. The reasons for this situation include the current tax rates (according to the Tax Code of Ukraine) and the insignificant volume of consumed water. Therefore, in order to increase the efficiency of the water management complex in financial markets, it is necessary to take into account the level of economic development of a particular region by adjusting existing rates for special water use or introducing additional coefficients. The overall value of the investment return of water use for Ukraine is 0.155. Like indicators of fiscal returns, regions with a lower level of economic development will be more effective in investing. In general, the main strengths of rental income can be attributed to the stable formation of local and state budgets, their situational growth, the strengthening of the role of local revenues. Among the negative factors are low indicators of actual water rent, significant differences between actual receipts and potential like. Opportunities and threats are associated primarily with the significant potential and the influence of unfavorable factors.

The tenure decision upon whether to buy or to rent accommodation has long-term consequences for households' financial wellbeing that influence macroeconomic development and stability when the cumulative effects of individual decisions are aggregated across populations. The author explains how the net present value (NPV) of ownership versus renting can be used as a framework for informing housing tenure decisions. Increases in holding periods, inflation and the spread between imputed rent and the opportunity cost of household savings shifts the balance in favour of ownership. With plausible assumptions the model demonstrates that households typically need a holding period of between five and ten years to achieve a breakeven NPV. The findings support the conjecture that inflation transfers wealth from renters and mortgage providers to owners, whereas deflation reverses the flow until rising default levels establish a new equilibrium.

Attributing a rental value to the dwellings of homeowners is essential in various contexts, including distributional analysis and the compilation of national accounts, consumer price indexes (CPIs), and purchasing power parity indexes. One of the methods for making the attribution is to use homeowner estimates of the market rental value they would pay (receive) for their dwellings if these were rented. This is known as homeowner self-assessed rent. However, homeowner estimates may not be accurate because of the way questions aimed at soliciting such information are phrased, the sentimental attachment of the homeowners to the properties, lack of information about rental markets, and other reasons. Yet, researchers and practitioners often neglect to ascertain the accuracy of homeowner assessments. This study argues that comparing unconditional or conditional means may be misleading if one has not ascertained whether the observable characteristics of homeowner and tenant dwellings are similar. Using Peruvian data from 2003 to 2017, the study tests the accuracy of self-assessed rental values with matching estimators. In Metropolitan Lima, homeowners typically provide accurate estimates of the rental market values of their dwellings. In rural areas, market rental values are underestimated by homeowners in more instances. The direction and magnitude of the inaccuracies in Metropolitan Lima and in rural areas are comparable and range between −25 percent and −20 percent.

Attributing a rental value to homeowners' dwellings is essential in different contexts, including poverty and inequality analysis, the compilation of national accounts, consumer price indexes, and estimation of purchasing power parity indexes. The proposed solution is often to use homeowners' estimates of the market rent they would pay for their dwelling if they were renting it, which is usually referred to as homeowners' self-assessed rent. Lack of alternative surveys and up-to-date and complete administrative data about dwellings' market values typically bounds researchers to test the accuracy of homeowners' self-assessed rent using only information from household budget surveys. Using 13 years of the Peruvian household budget survey, this paper compares two methods to assess the accuracy of homeowners' self-assessed rent and finds that the average homeowner in Lima overestimates the market rent of her dwelling by between 8 and 15 percent. However, homeowners' self-assessment inaccuracy fades away in most years when homeowners are compared with their most observationally similar tenants.

Housing is the largest durable good consumed by households. As such, any consumption-based measure of welfare, to be comprehensive, must include the value of the flow of services households derive from their dwellings, the so-called imputed rent. However, estimating imputed rents is a daunting task, which researchers and practitioners tend to overlook. This paper is the first attempt to assess the distributional impact of including housing in the welfare aggregate; the paper tests two estimation methods and analyzes four developing countries. The distributional impact cannot be predicted a priori, and evidence suggests it is context and method specific. Although changes in poverty and inequality are always statistically significant, they are only occasionally larger than one percentage point. By contrast, shared prosperity exhibits sizable changes, which might also determine international re-rankings. Albeit the inclusion of imputed rents reshuffles the set of poor households, observed changes in the socioeconomic profiling of the poor are unlikely to affect pro-poor policy design.

Attributing a rental value to homeowners' dwellings is essential in different contexts, including poverty and inequality analysis, the compilation of national accounts, consumer price indexes, and estimation of purchasing power parity indexes. The proposed solution is often to use homeowners' estimates of the market rent they would pay for their dwelling if they were renting it, which is usually referred to as homeowners' self-assessed rent. Lack of alternative surveys and up-to-date and complete administrative data about dwellings' market values typically bounds researchers to test the accuracy of homeowners' self-assessed rent using only information from household budget surveys. Using 13 years of the Peruvian household budget survey, this paper compares two methods to assess the accuracy of homeowners' self-assessed rent and finds that the average homeowner in Lima overestimates the market rent of her dwelling by between 8 and 15 percent. However, homeowners' self-assessment inaccuracy fades away in most years when homeowners are compared with their most observationally similar tenants.

Substantially increased wealth inequality across the developed world has prompted many philosophers, economists and legal theorists to support comprehensive taxes on all forms of wealth. Proposals include levying taxes on the basis of total wealth, or alternatively the change in the value of capital holdings measured from year-to-year. This contrasts with most existing policies that tax capital assets at the point they are transferred from one beneficiary to another through sale or gifts. Are these tax reforms likely to meet their aims of greater economic and political equality? We argue that these policies are likely to fail because, following neoclassical economic theory, they are based on a conception of capital as possessing given values in what amounts to a static equilibrium. This mischaracterizes the dynamic and subjective character of market economies and the contested value of real instantiations of capital goods. This makes them very difficult, often impossible, to value apart from at the point of voluntary transfer or profit realization. This means most taxes levied on a mark-to-market basis will be arbitrary and unfair. We propose alternative policies based on an income realization approach to taxation that are more likely to curb excessive wealth holdings. This includes introducing international treaties that prohibit preferential tax treatment for individual companies and specific sectors, and broadening the income tax base to include the imputed rent of personal housing wealth.

This paper explores the methodological differences underlying the construction of the national consumption aggregates that are used to estimate international poverty rates for all countries in the South Asia region, including Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. The analysis draws on a regional dataset of standardized consumption aggregates to assess the sensitivity of international poverty rates to the items included in national consumption aggregates. A key feature of the standardized aggregate is that it includes the reported value of housing rent for urban Indian homeowners. Using the standardized consumption aggregates reduces the international poverty rate in South Asia by 1.3 percentage points, or about 18.5 million people. Comparing standardized and non-standardized monetary welfare indicators to other nonmonetary indicators suggests that the latter are more consistent with the standardized consumption aggregates. Overall, the results strongly suggest that harmonizing the construction of welfare measures, particularly the treatment of imputed rent, can meaningfully improve the accuracy of international poverty comparisons.

This paper explores the methodological differences underlying the construction of the national consumption aggregates that are used to estimate international poverty rates for all countries in the South Asia region, including Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. The analysis draws on a regional dataset of standardized consumption aggregates to assess the sensitivity of international poverty rates to the items included in national consumption aggregates. A key feature of the standardized aggregate is that it includes the reported value of housing rent for urban Indian homeowners. Using the standardized consumption aggregates reduces the international poverty rate in South Asia by 1.3 percentage points, or about 18.5 million people. Comparing standardized and non-standardized monetary welfare indicators to other nonmonetary indicators suggests that the latter are more consistent with the standardized consumption aggregates. Overall, the results strongly suggest that harmonizing the construction of welfare measures, particularly the treatment of imputed rent, can meaningfully improve the accuracy of international poverty comparisons.

While cash housing benefits are generally included in household disposable income, the effect of social housing is not accounted for. This may provide a misleading picture of the impact of overall housing policies on inequality and poverty, as countries use different policies to help households meet their housing expenses. In this article, we present the first comprehensive study of the impact of in-kind housing benefits on income distribution and poverty in Europe. We contribute to two strands of the literature, notably the one that aims to quantify income advantages derived from housing and the other that aims to incorporate the value of public services in income. For this purpose, we calculate estimates of imputed rent and analyse how these benefits are distributed over the population and how they help to combat poverty. Our estimates are also relevant for the ongoing debate on whether cash or in-kind social transfers are to be preferred in social policy. We illustrate this with a case study for Germany, where we compare the distributive and poverty effect of cash and in-kind social benefits for housing for a longer time period.

For a household, home ownership provides necessary shelter, potential investment returns associated with property appreciation and a hedge against increased housing related cash outlays. In addition to potential appreciation, individual households benefit over time from a housing dividend defined as the difference between the market rent for the individual household’s housing unit and the household’s actual house ownership costs. The purchase of a house can substantially fix a household’s recurring housing related expenditures and generates a hedge (implied housing dividend) that increases with ownership tenure. This expenditure hedge (dividend) to home ownership is documented using pooled, cross-year samples from the Consumer Expenditure Survey (CEX). The housing dividend delivers a non-trivial effect on household non-housing expenditures after controlling for housing value, housing equity, financial assets and income.

This article presents estimates of poverty among older people in two countries—Australia and Japan—that are long-standing members of the OECD with unique social policy approaches. The focus is on understanding whether and why older person poverty rates differ, and on the role that housing costs play in explaining observed differences. Poverty is estimated using a conventional income metric and an alternative based on total expenditure, with allowance made in both cases for the impact of housing by deducting costs or including imputed rent, respectively, with poverty lines tied to the median of the appropriate metric. The overlap between income- and expenditure-based poverty rates is also examined and compared. The estimates reflect country differences in housing status (specifically, the rate of home ownership) and living arrangements (including how many older people live with others). They show that taking account of housing has a large impact on poverty in both countries, that expenditure poverty exceeds income poverty in Australia but not in Japan, and that while poverty is always lower in Japan than in Australia, the gap narrows when the expenditure metric is used.

This research examines the relationship between hedonically controlled housing price levels and subsequent changes in those prices across locations within MSAs. Are areas with a high price relative to an “imputed rent” paying for higher appreciation? In an efficient market (e.g., Gordon Growth Model), as fundamentals (impute rent) differ across locations and change over time, anticipation of these should generate a positive correlation between (residual) price levels and subsequent price changes. We undertake these tests in four different MSAs using a panel of repeat-sale house price indices that have been scaled to price levels with the hedonic attributes of the house and ZIP code. In three markets we find that identical houses in higher priced ZIP codes subsequently appreciate faster. In one market we find that there is little statistical difference.

Do market fundamentals explain house price inflation in Beijing? This paper answers the above by estimating the current value of residential houses in Beijing as the conditional expectations of the discounted stream of housing services accruing to the owner of houses. The value of housing services is represented by the imputed rent that is estimated by three market fundamentals – urban disposable income, the number of population and housing vacancy area. The cross-equation restrictions are tested between the restricted reduced form of the model under the assumption of rational expectation, and the unrestricted model governing the stochastic process of imputed rents. Empirical tests reject the null hypothesis of rational expectation. The cross-equation restrictions are not valid within the two tested models. The unrestricted model explains 60% of the changes in housing prices, and the residuals suggest that the model generally underestimated the extent of housing price changes that actually took pl...

This paper examines the antipoverty effect of public rental housing (PRH) in Hong Kong based on a comparison of estimated imputed rents from PRH through regression-based and stratified rental equivalence methods. Empirical analysis shows that stratified equivalence method tended to generate a larger effect of poverty rate reduction and smaller effect of poverty gap reduction than regression-based method. The study identified a trend towards upwardly biased estimate of public imputed rent in the implementation of stratified equivalence method in Hong Kong where limited strata was available for the estimation. The development of antipoverty measures may be misguided if the stratified equivalence method is used in its current form in Hong Kong. The paper suggests that the choice of estimation method has important implications for evaluating the pros and cons of PRH from both poverty reduction and budgetary perspectives.

International audience; Dans cet article, les effets de l’âge (ou du cycle de vie) et de génération sur le niveau de vie sont estimés à partir d’un pseudo-panel construit avec les différentes éditions de l’enquête Budget de famille entre 1979 et 2011. Le niveau de vie des ménages est apprécié avec le revenu disponible ou la consommation privée par unité de consommation, en isolant ou non les dépenses de logement et les loyers implicites. En s’appuyant sur la stratégie d’identification développée par Deaton et Paxson (1994) pour les modèles âge-période-cohorte (APC), deux principaux résultats sont mis en évidence. Tout d’abord, le niveau de vie augmente fortement avec l’âge, de 25 à 64 ans. Par exemple, la consommation des 50-54 ans est supérieure de 35 % à celle des 25-29 ans. À partir de 65 ans, l’évolution dépend de l’indicateur de niveau de vie considéré. Par ailleurs, le niveau de vie des générations du baby-boom est supérieur à celui des générations nées avant-guerre mais inférieur ou égal à celui des générations qui les suivent. Par exemple, la consommation de la cohorte née en 1946 est de 40 % supérieure à celle de la cohorte née en 1926 mais de 20 % inférieure à celle de la cohorte née en 1976. Si l’on prend l’ensemble des cohortes nées entre 1901 et 1979, aucune génération n’a été désavantagée par rapport à ses aînées. La discussion de ces résultats, notamment au regard de ceux issus d’autres stratégies d’identification ‒ la méthode âge-période-cohorte-détendancialisé (APCD) qui retire une tendance linéaire aux variables et une stratégie originale, la méthode espérance de vie-période-cohorte (EPC) qui remplace la variable d’âge par l’espérance de vie à chaque âge – souligne leur robustesse. Elle révèle l’importance de la croissance économique dans l’élévation du niveau de vie des générations et confirme qu’aucune génération n’a eu une consommation inférieure à celle des générations qui l’ont précédé.

Owner-occupied housing and public infrastructure services are a relevant part of the income distribution whose impacts have not yet been adequately studied, at least not from the distributive point of view. This paper suggests a way to find the market value for these services using hedonic prices. While far from new, this methodology is nevertheless useful in assigning values to these services. The paper uses Brazilian data from 1995, 2004, and 2014 to impute rental values for owner occupied housing and the associated infrastructure services. The results are that imputation of housing services considerably reduces inequality and that public infrastructure services have become more progressive as their expansion brings these services to increasingly poorer households.

This paper provides an analysis of how the New Zealand tax system may be affecting residential property markets. Like most OECD countries, New Zealand does not tax the imputed rent or capital gains from owner-occupied housing. Unlike most OECD countries, since 1989 New Zealand has taxed income placed in retirement savings funds on an income basis, rather than an expenditure basis. The result is likely to be the most distortionary tax policy towards housing in the OECD. Since 1989, these tax distortions have provided incentives that should have lead to significant increases in house prices and the average size of new dwellings, should have reduced owner-occupier rates, and should have led to a worsening of the overseas net asset position. The tax settings are likely to be regressive, and are not intergenerationally neutral, as they impose significant costs on current and future generations of young New Zealanders (and new migrants). Since it does not appear to be politically palatable to tax capital gains or imputed rent, to reduce the distortionary consequences of the tax system on housing markets New Zealand may wish to reconsider how it taxes retirement savings accounts by adopting the standard OECD approach.

Motivated by the increasing importance of housing wealth, the paper reviews the debate about the inclusion of housing in social indicators. The review identifies the availability of two different approaches: the inclusion of imputed rent and the deduction of housing expenses from disposable income. The advantages and disadvantages of different measurement methods are discussed from the point of view of different policy aims (poverty and tax analyses). This study uses 2010 EU-SILC data and provides an assessment of the impact of the housing situation of households on relative poverty and inequality and corresponding transition matrices into and out of poverty, according to the two approaches for measuring the housing situation. The results show that relative income poverty and inequality decrease if imputed rent is taken into account, while they increase if housing expenses are considered. The paper suggests that the deduction of housing expenses provides a better measure of relative poverty, while avoiding most measurement problems. The use of the capital market approach for the estimation of imputed rent would improve the assessment of the redistributive effect of taxes. The analysis and comparison of both approaches provides useful suggestions on the distributional effect of housing in different housing systems. Finally, the paper concludes with some remarks on housing-related variables and measurement issues for the construction of better social indicators.

This article investigates how the distribution of income changes when the standard disposable income (DI) is replaced by an extended income (EI) concept that includes the three “I”s: indirect taxes, imputed rent, and in-kind benefits. Second, it assesses the distributional effects of the main types of tax-benefit instruments under different income concepts. The analysis covers three European countries (Belgium, Greece, and the United Kingdom) characterized by substantially different tax-benefit systems. The overall redistributive effect of the tax-benefit systems depends heavily on the income concept considered and the differences across countries are smaller when considering the EI. Moreover, the common use of a narrower income concept, such as the DI, can lead to the overestimation of the redistributive effect of the cash tax-benefit instruments (in relative terms), the extent of this varying across countries, due to the size and distribution of three “I”s and the adoption of the needs-adjusted equivalence scale.

PurposeThe purpose of this paper is to examine the distributional implications of using full income instead of disposable income in the analysis of economic inequality. For that purpose the authors employ a very extensive list of noncash incomes with the aim of examining the distributional effects of noncash incomes and reassessing the level and structure of inequality under a comprehensive definition of income.Design/methodology/approachThe study employs the microdata of the 2004/2005 Greek Household Budget Survey. The value of non‐monetary components was estimated using the appropriate statistical methods and econometric techniques. Tools of income distribution analysis were utilized for assessing the distributional consequences of adopting an extended definition of income.FindingsThe results indicate that both private and public noncash incomes are far more equally distributed than monetary income, but the inequality‐reducing effect of publicly‐provided services is stronger. Noncash incomes appear to accrue more heavily to younger and older individuals.Research limitations/implicationsThe analysis uses the same equivalence scales for the analysis of both monetary income and full income. This treatment may be open to criticism in the case of in‐kind public transfers. Due to data limitations the authors do not take into account home‐produced services, as well as several in‐kind transfers such as the provision of elderly care.Practical implicationsThe study argues in favor of moving beyond disposable income for measuring inequality and for the purposes of social policy design.Originality/valueEven if several studies take into account particular noncash items, there is an important void in the distributional analysis of full income.

Housing policies are a complex set of taxes, benefts and incentives. This paper evaluates the redistributive effect of a comprehensive set of housing-related policies, taking into account the housing advantage of homeowners and social tenants. We use the Euromod microsimula-tion model to simulate housing policies in Estonia, Italy and the United Kingdom. Disentangling the contribution to inequality and poverty of each housing-related policy, we fnd that the current design of property taxes is not progressive and that other housing policies have a limited impact on inequality in Estonia and on both inequality and relative poverty in Italy. Only in the UK are housing policies more important than imputed rent in reducing inequality and poverty. In all three countries, housing-related policies favor the elderly. Although the United Kingdom has the most effective system of housing policies, Estonia seems to have the most effcient one.

The presence of extensive housing subsidies characterizes the current Italian tax system as inefficient. In this article, we study whether inefficiency is the price to be paid to improve equity, by assessing the distributive impact of housing taxation on households' well-being. We concentrate on the Personal Income Tax (PIT) on the main residence, and compare current provisions of the Tax Code with alternative approaches which consider the imputed rent (IR) from owner-occupied dwellings, and would make the tax system neutral with respect to the allocation of wealth among different assets. Holding revenues constant at the current level, we assess the distributional consequences of the IR approach in terms of several alternative scenarios. Our results suggest that the current tax system is as inefficient as it is inequitable. In particular, by including IR from owner-occupied dwellings as a component of the PIT gross income, we find that overall, inequality is reduced, while contemporaneously increasing efficiency in the allocation of wealth. Moreover, considering changes in tax liabilities for individual taxpayers, we show that taxing IRs will favour the young and penalize the elderly. (JEL Codes: H24, D31) Copyright The Author 2012. Published by Oxford University Press on behalf of Ifo Institute for Economic Research, Munich. All rights reserved. For permissions, please email: journals.permissions@oup.com, Oxford University Press.