Working Papers
Return on investment in supporting homeownership: Evidence from French interest-free loan policy
with Jean-Sauveur Ay and Julie Le Gallo (submitted)
This article estimates the impact of subsidised loans for new homeownership on the number of new homeowners (extensive margin), housing choices (intensive margin), and dwelling prices (capitalization effect). Our identification relies on the spatial and temporal variation of the French interest-free loan policy over the last decade, controlling for confounding assignment through a spatial semi-parametric propensity score. Our doubly robust results cannot rule out that the policy has no effect at the extensive margin, while it has significant intensive margin and capitalization effects. By considering a wide range of different policy objectives in terms of extensive and intensive margins, we compute the returns to government spending for counterfactual policy schemes and credit market conditions. Our simulations suggest that for reasonable values of policy objectives, increasing public spending has a return on investment lower than one, and may even be negative in some situations.
Winners and Losers: The Individual Consequences of Price Deviation on Capital Gains
with Antoine Peris and Laure Casanova Enault
We empirically assess how purchase price deviations affect the formation of housing capital gains. Making the best of the universe of transactions in France between 2012 and 2022, we first estimate an individual price deviation through a repeat sales approach with Heckman procedure to account for potential selection bias, controlling for experience in the housing market. Then, we regress realized capital gains on the individual deviation to assess the substitution between purchase price deviation and capital gains. Our results highlight that a 1 euro increase in purchase price decreases capital gains by 0.51 euro. We expect part of these individual deviations to affect the local housing market through future purchasers and sellers’ beliefs, leading to a mitigation of the capital gains differences.
Capitalisation of Demand-side Policies with Information Asymmetries and Market Segmentation
I consider the wealth accumulation resulting from potential price capitalization of policies stimulating buy-to-rent investments. I exploit multiple reforms of the French place based policy that stimulate buy-to-let investments through income tax cuts. To account for endogenous treatment assignment, I apply a Difference-in-Difference identification strategy using change in treatment assignment for specific municipalities that only affect eligibility to this policy. To uncover the underlying agents that benefit from the policy in term of wealth accumulation, I consider the housing market segmentation following the one assumed by policymakers, i.e. tenure status and building type. I also distinguish the price effect experienced by local purchasers (assumed to be perfectly informed) from that experienced by Out-Of-Town purchasers (with lower level of knowledge of the housing market). The findings indicate that i) the subsidy is at least partly capitalized on the targeted segments, leading to significant gains for developers and landowners ii) the policy repeal also increases the housing price for rented units in the existing demand due to shift in demand from subsidized to non-subsidized segment iii) owner-occupier experience no variations in their assets price iv) the price effect is symetrical between policy introduction and repeal.
new version coming soon
Spatial Sorting and Housing Wealth Persistence: Insights from the Universe of French Homeowners
with Jean-Sauveur Ay, Julie Le Gallo and Olivier Dupré
This article studies the relationship between initial levels and subsequent changes in gross housing wealth. Using administrative microdata on housing ownership and transactions in France over the period 2011-2019, we impute a market value for all housing portfolios held by private homeowners. We document strong housing wealth persistence (HWP) for this population, particularly with respect to the location of the main residences. We then examine HWP for three sub-populations identified from the panel structure of our data. HWP appears to be mainly driven by homeowners who change their main residence or receive a housing inheritance, while it is less pronounced for homeowners with a constant housing portfolio. The spatial sorting operated by the location choices of main residences (both between and within commuting zones) appears to be a key determinant of HWP, rather than capital gains from price variations of given housing portfolios.
version available upon request
Work in progress
Homeowners Response to Transmission Tax Reform: Evidence from France with Bluebery Planterose
Local Externalities of Housing Wealth Tax with Ségal Le Guern Herry
The Role of Bilateral Tax Treaties in the Stimulation of Housing Investments (ANR INTREALES)
Unpublished
The Dynamics of Property Ownership with Spatial Markets and Policies
PhD Manuscript, link