Nonprofit and profit companies in monopolistic competition

A homogenous goods market with nonprofit and profit companies engaged in monopolistic competition is proposed. In a short run equilibrium, entrance of more companies of both types increases consumer surplus and reduces company profit. However, nonprofit companies under a long run zero profit constraint will act inefficiently and have higher marginal costs than profit companies. From this follows that more funds for donations to nonprofit companies reduce the welfare to be gained on the market. Depending on the size of donations, nonprofit companies may have higher, the same or lower (quality) output than profit companies.Nonprofit; Market structure; Monopolistic competition; Efficiency; Funding; Donations; Grants; Welfare

Rent control and misallocation

The paper considers welfare effects of rent control when it is applied only in a sector of a rental housing market. In rent controlled sectors of the Danish rental housing market, we find welfare reducing overallocation of square meters between 9 and 17 per cent of actual allocations. Looking at the 20 per cent most overallocated households, the overallocation of square meters is between 42 and 92 per cent, and the estimated corresponding welfare loss ranges from 1.5 to 5.3 per cent of the average annual rent in the sectors.Rent control; Housing; Regulation; Price ceiling; Rationing; Allocation

Homeownership and subjective well-being

Favouring homeownership is an important part of housing policies in many countries. Although this may be explained by the preferences of the majority of voters, it may also be because homeownership is believed to have positive effects on individuals’ behaviour and welfare. Previous research seems to indicate that homeownership increases individual welfare, but it is difficult to control for all other factors that may influence and bias the results. Based on panel data from Danish surveys on living conditions from the years 1976, 1986 and 2000, the paper presents an analysis of homeownership and subjective well-being.Homeownership; Subjective well-being; Panel data

Homeownership and ill-being

Social policy aims to relieve the ill-being of low income groups, and housing policies in many European countries promote homeownership for low-income households. Previous economic research on subjective well-being seems to indicate that homeownership increases subjective well-being, but little research is done on the relations between homeownership and ill-being. The present study tries to fill some of this gap by use of panel data from three Danish surveys on living conditions in the years 1976, 1986 and 2000.Ill-being; subjective well-being; homeownership

Strategic tax and public service competition among local governments

Tax and public service competition between local governments concerning localisation of new residents is analysed in a setting of economic spillovers which means that also a neighbouring region will benefit from localisation via demand of residents in a border region, (a so-called host region). We identify two basic Nash-equilibrium outcomes of the analysed tax-game. In one of these outcomes local tax rates will be different across the regions – a fact that appears important for (future) empirical studies of local tax competition. Due to the lack of adequate theoretical modelling, studies in this field have often demonstrated spatial dependence of local policy variables without identifying the source of interaction between decision-makers. Our theoretical findings prove to be robust to a range of important expansions of the basic simple framework.Local tax competition; household locational choice; spillover effects; Nash-equilibria

Demand for owner-occupied homes in Danish municipalities - a spatial analysis

Theories on determinants of demand for owner occupied homes are summarised. An operational model which can be applied for empirical testing of theory is established. The model is estimated using Danish data. Theoretical determinants of the demand for owner occupied homes include social composition of population (age, social benefit receivers, household composition, civil status, education, nationality), economic ability (income), public regulation (regulation of house rent, housing subsidies, taxation), competition from alternative residence forms (measured by supply of subsidized housing), and population density. The data to be applied are aggregate data for 270 Danish municipalities, available annually for the period 1994-2004. An initial model specifies that the effects of the determinants are constant during the period 1994-2004. Presence of non-linearity, time trends, parametric instability and spatial spill-over are investigated and accounted for. Upon these adjustment, the empirical results generally confirm that the impacts of these determinants correspond to theory.

Demand for owner-occupied homes in Danish municipalities - a spatial analysis

Theories on determinants of demand for owner occupied homes are summarised. An operational model which can be applied for empirical testing of theory is established. The model is estimated using Danish data. Theoretical determinants of the demand for owner occupied homes include social composition of population (age, social benefit receivers, household composition, civil status, education, nationality), economic ability (income), public regulation (regulation of house rent, housing subsidies, taxation), competition from alternative residence forms (measured by supply of subsidized housing), and population density. The data to be applied are aggregate data for 270 Danish municipalities, available annually for the period 1994-2004. An initial model specifies that the effects of the determinants are constant during the period 1994-2004. Presence of non-linearity, time trends, parametric instability and spatial spill-over are investigated and accounted for. Upon these adjustment, the empirical results generally confirm that the impacts of these determinants correspond to theory