Economic Effects of Upfront Subsidies to Ownership : The Case of the Pret a Taux Zero in France
This article analyses some effects of the French upfront subsidy to homeownership called Pret a Taux Zero (PTZ) introduced in 1996. The PTZ can be viewed as a downpayment subsidy to low and middle-income first-time buyers. The effects of the subsidy are modelled by simulating the introduction of the PTZ in an econometric model of mobility and tenure choice estimated on micro-data. Our results show that the PTZ significantly increases access to ownership by allowing some households to leave the rental sector sooner. However, the PTZ generates a large windfall effect. We estimate that 85% of the beneficiaries in a 4-year period would still have moved to own in the absence of the subsidy. As a consequence, the PTZ has a rather low multiplier effect, which we estimate at around 1.3. Our simulations also show that the PTZ may not help to improve the overall quality of new construction in France.
| Main Authors: | , |
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| Format: | Journal Article biblioteca |
| Language: | EN |
| Published: |
2008
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| Subjects: | Welfare and Poverty: Government Programs, Provision and Effects of Welfare Programs I380, Urban, Rural, and Regional Economics: Housing Demand R210, Urban, Rural, and Regional Economics: Regional Migration, Regional Labor Markets, Population, Neighborhood Characteristics R230, |
| Online Access: | http://hdl.handle.net/10986/5787 |
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