Munich Personal RePEc Archive

You shall not build! (until tomorrow) [:] Electoral cycles and housing policies in Germany

Martin, Thorsten (2017): You shall not build! (until tomorrow) [:] Electoral cycles and housing policies in Germany.

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Abstract

This paper investigates whether local politicians adjust their approval of housing licenses during election times in Germany. For my research, I use a balanced Panel of 4,983 West German municipalities from 2002 to 2010. Due to the timing of local elections in Germany, I can disentangle the election effect from common time effects. My results suggest a decrease in new construction approvals for residential housing areas during election years of around 11 % evaluated at the mean, and an increase of similar magnitude in the years following the election. Furthermore, I am able to show that the decrease during election times is associated with the share of homeowners in a municipality. Hence, my research adds to the literature on political business cycles as well as to the existing literature on homevoters and their potential effect on housing policies during election times.

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