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

question 77

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

---

Definitions:

Ethical Hedonism

A philosophy that suggests the pursuit of pleasure and the avoidance of pain are the only components of a good and ethical life.

Altruistic Explanations

Justifications based on or showing a disinterested and selfless concern for the well-being of others.

Epicurius

An ancient Greek philosopher known for his philosophy that pleasure is the highest good and key to a happy life.

Human Existence

The condition or fact of living or having objective reality.