Homes for votes: prospective voting and housing privatization

University essay from Handelshögskolan i Stockholm/Institutionen för nationalekonomi

Abstract: In this paper we study the impact of housing privatization on voting. We use a "right to buy" programme in Stockholm, Sweden, in which municipal homes were sold to tenants at a discount, that allows us to evaluate theories of voting behaviour and tactical privatizations. We exploit the variation in programme participation in electoral districts and use first-difference estimation to identify the pre- and post-policy effects on the support for the centre-right bloc that implemented the policy. Results indicate that the programme had a pre-policy effect on electoral support for the centre-right bloc in the 2006 local election. Indistricts affected by the policy, the local centre-right bloc increased its vote share by on average 0.48 percentage points. This result is consistent with theories of prospective, self-interested and informed voting. We do not, however, obtain statistically significant estimates of the post-policy effect on voting that support the models of strategic privatizations and transfers. Moreover, we do not find support for the model, which predicts that politicians use policy to reward their core supporters.

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