Using Cross-Sectional Data from the Two Housing Assistance Supply Experiment

question 91

Multiple Choice

Using cross-sectional data from the two Housing Assistance Supply Experiment (HASE) sites-Brown County, Wisconsin, and St.Joseph County, Indiana-John Mulford of Rand Research estimates the long-run "permanent" income elasticity of housing expenditures to be 0.45 for owners.Using this information, what is likely to happen to housing expenditures if the government increases income transfers to recipients in HASE sites?

• A)Housing expenditures will not change.
• B)Housing expenditures in HASE sites will fall significantly as recipients move out of these areas to higher-income areas.
• C)Housing expenditures will increase.
• D)Housing expenditures will decrease by a small amount.

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Definitions:

Affective States

Emotional conditions or feelings that can affect perceptions, judgments, and behaviors.

Arousal

A state of heightened physiological and psychological activity or awareness, often induced by stimuli or situations.

Guilt

A psychological state that arises from the realization of causing harm or failing to meet moral standards.

Malnourished Children

Young individuals who suffer from poor nutritional status due to inadequate or unbalanced intake of nutrients, leading to health problems and developmental delays.