An Equilibrium Analysis of the Effects of Neighborhood-based Interventions on Children
Prof. Diego Daruich
Assistant Professor of Finance and Business Economics
University of Southern California – Marshall School of Business
Prof. Eric Chyn
This paper studies housing vouchers and urban redevelopment programs by incorporat-ing neighborhood effects into a general equilibrium overlapping-generations model with en-dogenous location choice and child development. We calibrate the model using U.S. data andestimate impacts of large-scale implementations of rental voucher and place-based subsidypolicies. Our core finding is that vouchers generate long-run welfare gains by reducing in-equality and generating skill improvements that offset higher taxation and other GE effects.Although vouchers lead to larger welfare gains on average, we find that place-based subsidiesmay be preferable in cities with constrained housing supply.
