Full Citation
Title: Migration, Housing Consumption, and Capital Gains in the Pre-taxpayer Relief Era
Citation Type: Dissertation/Thesis
Publication Year: 1999
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Abstract: Prior to passage of the Tax Payer Relief Act of 1997, the United States tax code encouraged housing consumption through its treatment of capital gains on primary residence sales. The former capital gains policy encouraged housing consumption by reducing or eliminating capital gains tax liabilities on primary home sales for households that sold one residence and then purchased another residence of sufficient value. The former policy substantially affected the consumption decisions of many households that migrated between metropolitan areas. In particular, most households that migrated from areas with higher housing costs to areas with lower housing costs consumed more housing as a result of the policy. This dissertation focuses on how the former capital gains policy affected the housing consumption of households that migrated between metropolitan areas during the period 1985 through 1990. Consumption and welfare effects of the former capital gains policy are simulated using the 1990 Public Use Micro Samples. Simulation results suggest the former policy may be responsible for upwards of one hundred billion dollars of American housing stock. An empirical investigation reveals that households that moved from areas with high housing costs to areas with low housing consumed substantially more housing than other households. A large portion of this increased consumption may have been due to the former policy. Because housing is a long-lived asset, the effects of the former policy will be part of the American landscape for years to come.
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Authors: Ehrlich, Steven Richard
Institution: University of Pennsylvania
Department: Regional Science
Advisor: Janice Fanning Madden
Degree: Doctor of Philosophy
Publisher Location: Philadelphia, PA
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Data Collections: IPUMS USA
Topics: Housing and Segregation, Migration and Immigration, Other
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