Another look at the capitalization of interest subsidies
Subtitle: evidence from Sweden
By: Tommy Berger ... [et al.].
Contributors: Berger, Tommy.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 6365; Working paper series (National Bureau of Economic Research) -- working paper no. 6365.
Publisher: National Bureau of Economic Research
Published: 1998
Place of publication: Cambridge, MA
Language: eng
Number of pages: 24
Subjects: Housing -- Prices -- Sweden -- Econometric models.; Housing subsidies -- Sweden -- Econometric models.; Housing -- Sweden -- Finance -- Econometric models.
Other titles: Capitalization of interest subsidies
Description: We analyze by far the most extensive data base yet employed in estimating capitalization of below-market interest rates into asset prices: nearly 300,000 sales of owner-occupied homes in Sweden from 1981 to 1993 with 40,000 including government subsidized interest rates. Our estimates indicates very clearly that interest subsidies are capitalized into house prices. The below-market financing parameter is consistently significantly negative in all model specifications, irrespective of assumptions about the degree of foresight structure and interest rate measure for all ten regions that we have studied. In our favored model specification the estimated capitalization coefficients center on minus unity capitalization.
Notes: "January 1998."

JEL no. G12.

Includes bibliographical references (p. 20).

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