01805cas a2200241 a 4500 AALejournalIMF000914 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451948806 1018-5941 BD-DhAAL BD-DhAAL Andersson, Krister. Investment in Housing in the United States : A Portfolio Approach; The Possible Effects of Changes in Tax Policy / Krister Andersson. Washington, D.C. : International Monetary Fund, 1990. 1 online resource (38 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students It is well known that the preferential tax treatment of housing induces an inefficient allocation of saving and investment. This paper analyzes, in a portfolio framework, how eliminating the deductibility of mortgage interest payments for federal income tax purposes might affect investment in housing. Expected rate of return and risk is estimated for three assets, bonds, housing, and stocks. The possibility that assets are imperfect substitutes is explicitly recognized in one section of the paper. The model suggests that the share of housing is likely to decrease by 4 to 9 percentage points if mortgage interest payments are not deductible. This may call for careful phasing of the change in policy. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1990/099 Full text available on IMF http://elibrary.imf.org/view/journals/001/1990/099/001.1990.issue-099-en.xml IMF e-Library