TY  - JOUR
AU  - Berger,Tommy
AU  - Englund,Peter
AU  - Hendershott,Patric H.
AU  - Turner,Bengt
TI  - Another Look at the Capitalization of Interest Subsidies: Evidence from Sweden
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6365
PY  - 1998
Y2  - January 1998
UR  - http://www.nber.org/papers/w6365
L1  - http://www.nber.org/papers/w6365.pdf
N1  - Author contact info:
Peter Englund

Patric H. Hendershott
Fisher Hall
Ohio State University
2100 Neil Avenue
Columbus, OH 43210
Tel: 218/963-1393
Fax: 218/963-9484
E-Mail: hendershott.2@osu.edu
AB  - We analyze by far the most extensive data base yet employed in estimating capitalization" of below-market interest rates into asset prices: nearly 300,000 sales of owner-occupied homes in" Sweden from 1981 to 1993 with 40,000 including government subsidized interest rates.  Our" estimates indicates very clearly that interest subsidies are capitalized into house prices.  The" below-market financing parameter is consistently significantly negative in all model" specifications, irrespective of assumptions about the degree of foresight structure and interest rate measure for all ten regions that we have studied.  In our favored model" specification the estimated capitalization coefficients center on minus unity capitalization.
ER  -