Imputed Income from Owner-Occupied Housing and Income Inequality

In: Urban studies, Volume 23, Issue 4, p. 323-331

Abstract

Imputed income from owner-occupied housing is generally not included in analyses of the distribution of income. Yet the value of homeownership is undoubtedly an important element distinguishing the economic status of one family from another. In this paper, using a new method to decompose income inequality by income source, we analyze the impact of potential income derived from the net worth of housing on a representative national sample of US homeowners. Using 1980 Survey of Residential Finance data, we find that housing income adds less to inequality per dollar of income than does income from all other sources.