• Property Taxation and Real Estate Price Dispersion.

I test the claim that property taxes reduce the price dispersion across properties of different quality thus reducing wealth inequality. I exploit the removal of the Italian property tax on main residences and its design to identify the effect of such tax on property prices. The results are consistent with the previous claims but heterogeneous in magnitude across different property markets. Additionally, I design a monocentric city model to connect the real estate asset literature with the urban economics one, and I find that the former has been ignoring two channels for the property tax to affect prices: the ability of households to switch between properties of different quality and its effect on the local consumption good bundle price.

JEL codes: G12, H24, R21, R31, R38

• Geography in a Partially Segmented Housing Market

I propose a new mechanism to account for the price-to-rent ratio dispersion across Italy. I construct a model with two types of agents, one of which is not able to access the financial market. The agent that cannot borrow or loan, thus will have a relative preference for renting then its counterpart. If the two agents locate in different locations, the model generates a price-to-rent ratio dispersion even though the locations have the same wages and expectations regarding the future. In addition the model features landlord-consumers as opposed to the landlord-firms of the previous literature.

The model is also able to recreate previously established mechanisms in addition to the one proposed by this paper. Thus, the model is a good starting point for a richer spatial model of the renting versus home-ownership question. In particular it suggests that the relationship between a national financial market and several local residential ones is a fruitful area for further research.

JEL codes: G11, G21, R21, R31