Economic Effects of Upfront Subsidies to Ownership : The Case of the Pret a Taux Zero in France

• Tác giả: Laurent Gobillon
• Ngôn ngữ: eng
• Ký hiệu phân loại: 016.84 Bibliographies and catalogs of works on specific subjects or in specific disciplines
• Thông tin xuất bản: 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 305230
• Chủ đề: 1. Provision and Effects of Welfare Programs I380; 2. Regional Labor Markets; 3. Urban, Rural, and Regional Economics: Housing Demand R210; 4. Urban, Rural, and Regional Economics: Regional Migration; 5. Welfare and Poverty: Government Programs

Tóm tắt

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.