Housing and Income Inequality in Europe: Distributional Effects of Non-Cash Income From Imputed Rents

Emanuel List*

*Corresponding author for this work

Publication: Scientific journalJournal articlepeer-review

Abstract

This article uses survey data to estimate non-cash income from imputed rents, using a consistent methodology for all countries to assemble comparable statistics that allow for a valid inter-country comparison. We can confirm a significant impact of non-cash income and find an inequality-decreasing effect for the unconditional income distribution which highly correlates with the proportion of owner-occupiers in the respective countries. However, aggregated inequality measures are not suited to analyze the increase in the conditional income inequality between owner-occupiers and renters, who do not obtain income from imputed rents by definition. Therefore, we apply a reweighting decomposition that controls for the heterogeneous housing characteristics among European countries and allows us to decompose the distributional changes into a part that is explained by the proportion of tenure types and household size and a remaining part that reflects the relative dispersion of imputed rents along the income distribution.

Original languageEnglish
Pages (from-to)504-532
JournalReview of Income and Wealth
Volume69
Issue number2
Early online date1 Jul 2022
DOIs
Publication statusPublished - Jun 2023

Bibliographical note

Publisher Copyright:
© 2022 The Author. Review of Income and Wealth published by John Wiley & Sons Ltd on behalf of International Association for Research in Income and Wealth.

Keywords

  • housing markets
  • imputed rents
  • income inequality

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