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Housing : The Market Versus the Welfare State Model Revisited

University of Washington, Seattle

Most housing policy analyses conclude that housing is a commodity that cannot be efficiently and equitably allocated via the market process. Major contentions in this respect are that market allocation will result in suboptimal housing investment and that the market process leads to the creation of slums. Furthermore, the proponents of the welfare housing model argue that welfare state interventions have raised the average level of housing consumption above the level that would have been achieved under a more market-oriented allocative model. However, both theory and evidence fail to support these beliefs.

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