KDI Journal of Economic Policy

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P-ISSN 1738-656X

Vol.29, No.2

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한국개발연구. Vol. 29, No. 2, December 2007, pp. 159-175

https://doi.org/10.23895/kdijep.2005.29.2.159

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Estimating the Benefits of the Korean Public Housing Program for Low-Income Families Under Non-Homothetic Preference

Joon hyuk Song

Author & Article History

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Abstract

It is widely accepted that public rental housing programs affect both the allocation of resources and the distribution of welfare. This paper explains institutional arrangements of public housing program in Korea and assesses the benefits of the program. In contrast to the previous studies which employed homothetic preferences, the benefits of the public housing were estimated based on non-homothetic preferences to allow for different income effects across households. Empirical results suggest that average benefit-cost ratio of public housing program is 0.91, and hence, the deadweight loss seems to be well-contained in Korean public housing program compared to other countries. However, the distribution of the benefits reveals that the transmission of the benefits should be improved to achieve the desired goals of residential welfare for low income families.

Keywords

Nonhomothetic Preference(비동도적 선호체계), Public Housing(공공임대주택), BenefitCost Ratio(비용편익비율)

JEL Code

D01, D31, D61, D63

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