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...

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Main Authors:	Gobillon, Laurent, le Blanc, David
Format:	Journal Article
Language:	EN
Published:	2012
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

id	okr-10986-5787
recordtype	oai_dc
spelling	okr-10986-57872021-04-23T14:02:23Z Economic Effects of Upfront Subsidies to Ownership : The Case of the Pret a Taux Zero in France Gobillon, Laurent le Blanc, David 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 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. 2012-03-30T07:34:33Z 2012-03-30T07:34:33Z 2008 Journal Article Journal of Housing Economics 10511377 http://hdl.handle.net/10986/5787 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article France
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	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
spellingShingle	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 Gobillon, Laurent le Blanc, David Economic Effects of Upfront Subsidies to Ownership : The Case of the Pret a Taux Zero in France
geographic_facet	France
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	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.
format	Journal Article
author	Gobillon, Laurent le Blanc, David
author_facet	Gobillon, Laurent le Blanc, David
author_sort	Gobillon, Laurent
title	Economic Effects of Upfront Subsidies to Ownership : The Case of the Pret a Taux Zero in France
title_short	Economic Effects of Upfront Subsidies to Ownership : The Case of the Pret a Taux Zero in France
title_full	Economic Effects of Upfront Subsidies to Ownership : The Case of the Pret a Taux Zero in France
title_fullStr	Economic Effects of Upfront Subsidies to Ownership : The Case of the Pret a Taux Zero in France
title_full_unstemmed	Economic Effects of Upfront Subsidies to Ownership : The Case of the Pret a Taux Zero in France
title_sort	economic effects of upfront subsidies to ownership : the case of the pret a taux zero in france
publishDate	2012
url	http://hdl.handle.net/10986/5787
_version_	1764396290964193280

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

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