A study on the distributional and efficiency consequences of the housing finance subsidy programs: The case of Korea
This study is empirically and theoretically concerned with the general framework of and significant questions in understanding the distributional and efficiency consequences of the subsidized housing finance programs of the two dominant Korean state mortgage institutions--National Housing Fund (NHF) and Korea Housing Bank (KHB). The specific research questions asked are as follows: i) Who are the beneficiaries of the subsidized sources of financing?; (ii) What are the benefits of the credit subsidies to their direct beneficiaries?; (iii) Are the subsidy benefits progressively, proportionally, or regressively distributed?; (iv) To what extent do equally situated households receive equal benefits?; and (v) Are the subsidy programs economically efficient?
The first question is explored descriptively. While the average income of the NHF sample group is found to be lower than that of the urban population, income profiles of the KHB group is appreciably higher than of the urban population, evidencing apparently the subsidization of the fairly affluent. Descriptive statistics indicate that, though family income and previous tenure type of the two beneficiary groups materially differ, most other family attributes are largely similar. Cross tabulation of the housing attributes also reveals that, while NHF-mortgage-backed units are mostly small-sized and newly built, KHB program beneficiaries occupied units from a wider array of value, age, and locational submarkets; albeit the unit sizes of both groups generally comply with lending policy standards.
The second question is explored within the theoretical framework of Hicksian measure of benefit. On deriving an explicit benefit estimation function based on the conceptual discussion of utility functions, the magnitude of the recipient benefits that actually accrue from the programs are estimated for the study samples.
The third question concerns the vertical equity consequence of the distribution of program benefits. It is explored by regression analysis and measures of arc elasticities.
The fourth question relates to the horizontal equity consequence of the programs, and is explored by regression interpretation and measurement of coefficient of variation.
Finally, the effects of the program-provided credits on recipients' consumption choices, and efficiencies of these credit programs are analyzed. (Abstract shortened by UMI.)
Area planning & development;
0999: Area planning & development