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Housing sector reforms and macroeconomic adjustment in Russia


Gurenko, Eugene Nickolai (1996). Housing sector reforms and macroeconomic adjustment in Russia. Master's thesis / Doctoral dissertation.


This dissertation considers the cumulative effect of a rationed housing-delivery mechanism and 70 years of capital investments in housing made without regard to demand, to energy or spatial efficiency in Russia. The purpose of the dissertation is to analyze the legacy of the socialist housing allocation on implementing market reforms. In addition to examining the efficiency implications of socialist housing policies, the thesis examines the equity effect of administrative housing allocation on income distribution during the period of transition. It shows how the legacy of a supply-determined, administratively restricted system of resource allocation in housing and urban infrastructure might become an obstacle for the reform process. The research is based on 1992 data set extracted from a World Bank-funded Longitudinal Monitoring Survey of Russian households. The data involve econometric estimates of relationships between housing, income, and household characteristics. The results of these measurements are used to estimate the magnitude of urban sector distortions inherited from the socialist past. By estimating household income imputed from socialist housing subsidies, the thesis shows how these transfers cushioned the increase in inequalities caused by economic transition; it also provides heuristic estimates of the implicit wage tax needed to finance these subsidies, and it models the efficiency losses that this tax and administrative rationing imposed on households. Cumulative distributional implications of these policies are also reviewed. The major finding is that in 1992, Russian households were unable to beat the administrative rationing system. Instead of being able to use their resources to bid for the amount of housing they wanted, factors such as age determined housing allocation, which implies the long-term effects of administrative restrictions on housing sector reforms. The results also indicate that the Russian housing allocation system had a progressive effect on income distribution.

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Gurenko, Eugene Nickolai