https://pure.iiasa.ac.at/id/eprint/13562 2021-08-27T17:27:33Z info:eu-repo/semantics/descriptiveMetadata https://pure.iiasa.ac.at/id/eprint/13562/ Discretionary Profit in Subsidised Housing Markets Nentjes, A. Schöpp, W. 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. 2000-01 Article PeerReviewed 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>. 10.1080/0042098002357 10.1080/0042098002357 10.1080/0042098002357 info:eu-repo/semantics/humanStartPage