Land, Wealth, and Taxation
This paper examines the role of land in wealth dynamics and its consequences for efficiency and inequality. We focus on the interplay among agents’ bidding for location, mortgage market imperfections, and inheritance in a model in which agents leave to their heirs financial bequests and their housing wealth. The borrowing constraint generates a housing return premium and spatial wealth sorting, which translate into persistent wealth inequality. Since altruism and the borrowing constraint distort land price formation, we show that taxing land rent transmitted between generations is optimal. Land taxation cannot be disconnected from taxation on intergenerational wealth transfers. (JEL D31, D64, H71, Q24, R23, R31, R52)
Authors
- Carl Gaigné (ORCID: https://orcid.org/0000-0002-1540-234X)
- Fabien Moizeau (ORCID: https://orcid.org/0000-0002-5883-3852)
Institutions
- Université Paris-Panthéon-Assas (FR)
- Centre National de la Recherche Scientifique (FR)
- Centre de Recherche en Économie et Management (FR)
- Institut National de Recherche pour l'Agriculture, l'Alimentation et l'Environnement (FR)
- Groupe d'Analyse et de Théorie Economique Lyon St Etienne (FR)
- Université Laval (CA)
- Structures et marchés agricoles, ressources et territoires (FR)
- Université de Rennes (FR)
Publication Details
- Journal
- American Economic Journal Microeconomics
- Published
- 2026-10-28
- DOI
- https://doi.org/10.1257/mic.20240094
- Primary Topic
- Housing Market and Economics
- Type
- article
- Field-Weighted Citation Impact
- 0.00