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

question 183

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 increase significantly.
• 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, but not significantly.
• D)Housing expenditures will decrease by a small amount.

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Definitions:

Corporate Property

Assets owned by a corporation, which can include real estate, machinery, intellectual property, and other tangible and intangible assets.

Durable Power of Attorney

A legal document that grants a designated person the authority to make financial and/or health care decisions on behalf of someone else, even if the grantor becomes incapacitated.

Incapacity

The lack of legal ability to perform an act, such as entering into a contract due to mental disability or minority.

Sound Mind and Memory

A legal term indicating that a person is mentally competent to make decisions and understand their consequences.