Exploring mortgage interest deduction reforms: An equilibrium sorting model with endogenous tenure choice
构建了一个同时包含租赁和购房市场的均衡排序模型，内生处理家庭住房选择，并以波士顿为例模拟抵押贷款利息扣除改革的影响，发现改革可能在不降低住房拥有率的同时减少联邦赤字。
In most equilibrium sorting models (ESMs) of residential choice across neighborhoods, the question of whether households rent or buy their home is either ignored or else tenure status is treated as exogenous. Of course, tenure status is not exogenous and households' tenure choices may have important public policy implications, particularly since higher levels of homeownership have been shown to correlate strongly with various indicators of improved neighborhood quality. Indeed, numerous policies including that of mortgage interest deduction (MID) have been implemented with the express purpose of promoting homeownership. This paper presents an ESM with simultaneous rental and purchase markets in which tenure choice is endogenized and neighborhood quality is partly determined by neighborhood composition. The public policy relevance of the model is shown through a calibration exercise for Boston, Massachusetts, which explores the impacts of various reforms to the MID policy. The simulations confirm some of the arguments made about reforming MID but also demonstrate how the complex patterns of behavioral change induced by policy reform can lead to unanticipated effects. The results suggest that it may be possible to reform MID while maintaining the prevailing rates of homeownership and reducing the federal budget deficit.