Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/242367 
Year of Publication: 
2021
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2021: Climate Economics
Publisher: 
ZBW - Leibniz Information Centre for Economics, Kiel, Hamburg
Abstract: 
Subsidizing homeownership makes cities decentralize, so Muth (1967) suggested over half a century ago, and so Voith (1999) and Glaeser (2011) have argued more recently. This paper provides a first quasi-experimental test of "Muth's hypothesis". We analyze a homeownership subsidy's effects on urban form, by turning to Germany's 2005 subsidy repeal. Because housing in the city center was predominantly rental, prospective owner-occupiers needed to move to the city periphery. We are able to identify the subsidy's effect on decentralization because we capitalize on the subsidy's variation both in timing and design. We find that repealing the subsidy did contribute to recentralizing Germany's cities. This highlights the decentralizing role of the original homeownership subsidy. Inasmuch decentralization begets greater carbon dioxide emissions, encouraging homeownership is at cross-purposes with mitigating global warming.
Subjects: 
Homeownership Subsidy
Subsidy Repeal
Housing Recentralization
Global Warming
Suburban Land Use
JEL: 
R12
D72
R52
Document Type: 
Conference Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.