relation: https://pure.iiasa.ac.at/id/eprint/13562/
title: Discretionary Profit in Subsidised Housing Markets
creator: Nentjes, A.
creator: Schöpp, W.
description: In the subsidised housing sector, building corporations can use their market power as purchasers to raise output of subsidised housing to a level higher than it is with perfect competition on both sides of the market. This holds true if the building society is perfectly X-efficient. The proposition is not necessarily true if the corporation maximises a utility function in which discretionary profit, or organisational slack, is an argument. The X-inefficient building society may set output higher or lower than with perfect competition. If the government grants a fixed subsidy per house and tries to constrain X-inefficiency by imposing a maximum price, this might be an incentive for the building corporation to maintain a planned shortage of subsidised houses. However, housing shortages will be smaller and welfare possibly greater than it is with perfect competition. The existence of a perfectly competitive non-subsidised housing sector is for the building corporation an incentive to increase strategically the output of subsidised housing and reduce planned shortages; but it does not necessarily eliminate such shortages.
date: 2000-01
type: Article
type: PeerReviewed
identifier:   Nentjes, A. & Schöpp, W. <https://pure.iiasa.ac.at/view/iiasa/273.html> ORCID: https://orcid.org/0000-0001-5990-423X <https://orcid.org/0000-0001-5990-423X>  (2000).  Discretionary Profit in Subsidised Housing Markets.   Urban Studies 37 (1) 181-194. 10.1080/0042098002357 <https://doi.org/10.1080/0042098002357>.       
relation: 10.1080/0042098002357
identifier: 10.1080/0042098002357
doi: 10.1080/0042098002357