Housing, Imputed Rent, and Households' Welfare
Housing is the largest durable good consumed by households. As such, any consumption-based measure of welfare, to be comprehensive, must include the value of the flow of services households derive from their dwellings, the so-called imputed rent. H...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/544041565094894609/Housing-Imputed-Rent-and-Households-Welfare http://hdl.handle.net/10986/32207 |
| Summary: | Housing is the largest durable good
consumed by households. As such, any consumption-based
measure of welfare, to be comprehensive, must include the
value of the flow of services households derive from their
dwellings, the so-called imputed rent. However, estimating
imputed rents is a daunting task, which researchers and
practitioners tend to overlook. This paper is the first
attempt to assess the distributional impact of including
housing in the welfare aggregate; the paper tests two
estimation methods and analyzes four developing countries.
The distributional impact cannot be predicted a priori, and
evidence suggests it is context and method specific.
Although changes in poverty and inequality are always
statistically significant, they are only occasionally larger
than one percentage point. By contrast, shared prosperity
exhibits sizable changes, which might also determine
international re-rankings. Albeit the inclusion of imputed
rents reshuffles the set of poor households, observed
changes in the socioeconomic profiling of the poor are
unlikely to affect pro-poor policy design. |
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