Inflation and the Taxation of Equity in Corporations and Owner-Occupied Housing

Ebrill, Liam; Possen, Uri M.

doi:10.2307/1991490

Cited by 12 publications

(7 citation statements)

References 18 publications

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“…Some focused on investigating the interactions between inflation rates and housing markets (Dougherty and van Order, 1982;Poterba, 1984). Some other studies were concentrating on either rental versus owner-occupancy decisions (for example, Henderson and Ioannides, 1983;Swan, 1984) or on the differential returns to owner-occupation as opposed to nonresidential investment where the tax provisions differ (Ebrill and Possen, 1982;Hu, 1981, 1983;Summers, 1981).…”

Section: Literature Reviewmentioning

confidence: 99%

The Dynamics of the Singapore Private Housing Market

2004

Urban Studies

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In this paper, a dynamic stock flow model is modified and applied to the Singapore private housing market. Two empirical models are then constructed, which offer an explanation for the dynamic patterns of both real private housing prices and new housing construction. In the long run, movements in the real GDP per capita and the total housing stock are found to have significant impacts on real housing prices, while the user cost, the public resale housing prices and the autocorrelation of housing prices with one lag explain most of the short-run dynamics of real housing prices. On the supply side, the long-run price elasticity of new housing construction is 1.31. It is also found that long-run new housing construction drops 6.5 per cent for every 1 per cent increase in the total housing stock.

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Section: Literature Reviewmentioning

confidence: 99%

The Dynamics of the Singapore Private Housing Market

2004

Urban Studies

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“…The 2010 home purchase policy exerts control over the amount of commodity housing purchased for a family [8]. However, average house prices in Chinese estate is the best hedge against expected and unexpected inflation [32,35,36]; house prices are simply an inflation hedge in the long run [37,38]. Figure 2 shows that house prices appear to change with broad money (M2).…”

Section: Introductionmentioning

confidence: 99%

Determinants and Sustainability of House Prices: The Case of Shanghai, China

Zou

Chau

2015

Sustainability

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Recent housing policies include measures for home purchase control and shanty town redevelopment. This study proposes sustainable pricing, in that the long-run equilibrium price is determined by the fundamentals of house prices. We argue that changes in CPI might have led to rapidly growing house prices and rather high price levels. We investigate the long-run or short-run impacts of new commodity housing completions, transacted square meters of commodity housing, and CPI for house prices in Shanghai. We adopt monthly data for the period of 2005-2010. We test for unit roots using both the ADF and PP techniques and structural breaks using both the Zivot-Andrews (Model B) and Perron (Model C) methods. Considering Cheung-Lai and Reinsel-Ahn finite-sample corrections, the results suggest a long-run equilibrium. Housing completions negatively impact house prices in the short run. A positive volume-price relationship is suggested. Housing sales affect house prices in the short run but not vice versa. Hence, the empirical evidence supports the search model. In addition, CPI is strongly exogenous with respect to the long-run relationship and thus is a long-term determinant of house prices. CPI also positively and drastically influences house prices in the short run. Therefore, a reduction in inflation rate could stabilize house prices, increasing the chances of sustainable prices in the future.

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“…Using a model not strictly based on portfolio equilibrium assumptions, Ebrill and Possen (1982) come to a similar conclusion, both theoretically and empirically. They focus on the real rate of return to equity in corporations relative to the real rate of return to equity in owner-occupied housing, taking account of their different tax treatments in a fixed asset supply model.…”

Section: Il Previous Uk Studiesmentioning

confidence: 55%