HFCS-Seminar (October 2021)
Housing policy and the distribution of wealth: A comparative perspective on public and private wealth
With Severin Rapp, Vienna University of Economics and Business, Institute for Macroeconomics
Regional differences in the level and distribution of wealth in Austria are pronounced. Yet, appraising household wealth from a comparative perspective involves substantial conceptual challenges. Most importantly, how can measurement account for differences in public wealth ownership, if the latter substitutes for private wealth? Our study aims at breaking new ground in estimating the distributional effects of public wealth in a comparative framework, focusing on communal housing assets. Drawing on the Austrian HFCS data, we contrast Vienna with other federal states in terms of the level and distribution of private household wealth. In addition, the study employs a novel method to derive estimates of public housing stock from the capitalised imputed rental income of private households inhabiting communal housing. Going beyond providing estimates of the asset equivalent of communal housing stocks, we measure the distributional effects of such policies. Summing up private wealth and public housing wealth for households enjoying imputed rental income from communal housing property, we arrive at hypothetical wealth distributions. While this synthetic measure of wealth remains highly dispersed, we find that public housing wealth reduces both horizontal and vertical inequality. Crucially, regional differences within Austria appear less pronounced owing to the adjustment. This is due to particularly strong redistributive effects in Vienna.
Tuesday, October 5, 2021, 4 p.m.