Tinbergen Seminar – Welfare effects of subsidizing first-timehomebuyers

Countries around the world subsidize first-time homebuyers. We propose a novel sufficient statistics framework with indivisible housing consumption and tenure choice to analyze both the efficiency and equity implications of such policies. Based on a recent policy change in the Netherlands, which removed transfer taxes for young homebuyers, we estimate the necessary empirical parameters in a quasi-experimental setting using administrative data. We find that subsidizing starters significantly alters home purchase patterns but does not affect the long-term homeownership rate. We find little evidence for aggregate price increases. Joint work with Jonas Wogh.