Cover: Price effects of housing allowances

Price effects of housing allowances

Published 1982

by C. Peter Rydell, C. Lance Barnett

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The Housing Assistance Supply Experiment showed that housing allowances do not cause serious price increases, contrary to many pre-experiment predictions. Empirical observation and theoretical analyses both indicate that even during the initial, maximum-impact years the program increased the price of rental housing services by at most a few percent. The reasons for the small price effect are that the demand shift caused by the program is smaller than many anticipated, and that the supply response of the housing market is greater than many anticipated.

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