Is the Housing Market an Inequality Generator?

Abstract

We study inequality generated by capital gains in the housing market by exploiting two countrywide data sources in Norway: a registry of housing units and a database of transactions. We identify and follow all individuals in six birth cohorts in Norway, who were owners on January 1, 2007, and on January 1, 2019, and estimate the sum of their actual and potential capital gains from their owned and sold properties. We demonstrate that there is a substantial increase in capital gains inequality over the period, both across and within geographical strata and across and within birth cohorts. We find a statistically significant and economically meaningful difference between the distributions of capital gains of female and male owners in Oslo.