Moving and Housing Expenditure

The paper emphasizes initially the effects of moving transaction costs on the potential effect of government rent subsidy programs. As a concomitant to this analysis, the paper reaffirms the low income elasticities of housing expenditure among low-income renters found by others. Moving transaction costs are high on average among renters in our sample but vary widely between geographic regions and evidently vary a great deal among families as well. By our measure, transaction costs reflect monetary and especially non-monetary gains and losses associated with moving. Moving transaction costs in conjunction with low income elasticities make government lump-sum transfers very ineffective in increasing housing expenditure among low-incomerenters.A dollar of unconstrained transfer payment would increase housing expenditure by only 2 to 7 cents in the two cities in our data set. Minimum rent plans, that make the transfer payment conditional on spending at leasta minimum amount on rent, have larger effects on average than unconstrained transfers. Typical programs might increase rent by 10 to 30 cents per dollar of transfer payment. But families who spend the least on rent a real so those l