Housing, Economic Growth and Poverty: A Literature Review

trapping, Economic Growth and P all overty A Literature ReviewAbstractThis paper reviews lit on the relationship in the midst of admit pay, stinting egress and impoverishment. bandage it is evident that accommodate twirl creates jobs, the review reveals that in that location is a need for much re calculate to determine the long-term stinting benefits of accommodate and whether caparison pay in take upicular nominate be an nubive tool in eradicating privation. The limited show is due in part to limits in data and the need to utilize robust econometric techniques to determine the perpet symmetryn of causality in these relationships (i.e. does increase scotch growth top to increase demand for caparison and hence house mental synthesis and finance or does accommodate construction and finance lead to increased frugal growth and start out exiguity). Though forgetful contract evidence was found, the monetary compound literature suggests that as caparison f inance deepens pecuniary markets, it whitethorn play a situation in pauperism every(prenominal)eviation. This relationship should be enquired further.1. IntroductionWhile the focus of this review is to summarize empirical evidence regarding the relationship between lodgment, economic growth and poverty, in that location is considerable stylized and anecdotal evidence that makes a case for hold as a prescription for poverty. This literature is extensive although recent books on eradicating poverty in the under create world say very little explicitly about the role of trapping. The End of Poverty by Jeffrey Sachs (2011), dry lands that most would conduct that fact that schools, clinics, roads, electricity, ports, soil nutrients, clean drinking water and the same argon the basic necessities for a life of dignity and health, as closely as for economic productivity. Sachs goes on to delineate the st locategy for ending extreme poverty by 2025. While he mentions let on inve stments in people and in infrastructure, he does non explicitly mention lodgment. The same can be said of Banerjee and Duflo (2011) and Karlan and Appel (2011). Perhaps there is an underlying assumption that housing is necessary. Perhaps, housing is considered part of the infrastructure that they tie in to. Or, perhaps the underlying bacillusief is that economic growth exit lead to better housing conditions. At any valuate, a specific consideration of the meeting of housing on poverty is not given in these recent books on the subject of eradicating poverty in this millennium. This is representative of what was discovered upon reviewing the empirical literature on this issue.Some authors assert thathousing loans and finance atomic number 18 needed barely do not provide economic analysis toback this claim. For suffice, Bunnarith(2004) in discussing national housing policy in Cambodia asserts that housingis needed so that people can have a safe and secure environment. t here is no discussion in his policy paper ofthe true economic daze of housing construction or finance on economic growthor poverty reduction. Similarly, Habitatfor Humanity specific solelyy acknowledges that housing is necessary to eradicatepoverty. In Consequences of Poverty hold, Habitat for Humanity asserts that the lack of suitable housingcreates disadvantages at many levels. Itis seen as interfering with a households ability to break out of povertybecause so much of the households m and bullion is spent on house maintenanceand repairs and not on food, health, education and income generation. Due to a lack of suitable housing, there is little capability arising from illnesses, inability to educate children and aninability to provide a safe and secure environment for economic endeavors. These are testable implications however littlehas been done to document these losings empirically, likely due to datalimitations. Some evidence is found andlisted in the education section.Whi le there is quite a bitof literature on the interactions between GDP and housing investment, there issurprisingly little evidence documenting the relationship between housing,economic growth and poverty. One reasonfor the limited evidence is limitations in quantity of data in develop countries,e particular(prenominal)ly the poorest ones, Hull (2009).A second reason for the limited evidence is that it is difficult todetermine the direction of causality between economic growth and housing. Thereis a need to use general equilibrium sit arounds which are not easily tested withthe chromosome mappingal data in the developing countries.Data limitations are particularly severe when trying to test theserelationships in the poorest of the developing countries. Finally, macroeconomics and housing financewere not analyze in skill in economic literature prior to the 1980s, even for theU.S. When studies were done theytypically looked at housing demand as a function of income and growth not t he wallop of housing on economic growth, see Leung (2004). Even if where there is analysis of housingfinance in developed countries, it whitethorn be difficult to make direct inferencesabout relationships between housing and economic growth in developing countriesusing those results because so many some former(a) factors are at work including financial sector growth, regimen involvement and types of housing.With these limitations in mind, there is some information that whitethorn be useful in analyzing the bushel of housing finance on economic growth, job creation and poverty. The collision of housing on economic growth, in developed and some developing markets is high school decreaseed in the next section. Next, there is a review of the impact of housing on job growth. The third section reviews what is known about the impact of housing and housing finance on job creation. Section four reviews the impact of housing finance on poverty. Some inferences in that section are grou nd on studies of financial market development on poverty. Section five examines potential societal and revenue consequences of housing. Finally there is a summary of chanceings in section six.2. caparison and Economic ImpactHousing and Economic GrowthHongyu, park and Siqi(2002) recognize the causality dilemma when studying housing investment andeconomic growth. They use Grangercausality tests to study the case of China from 1981 2000. This study does not address the povertyimpact it just studies housing and economic growth. The authors muster that compared to non-housinginvestment, housing investment has a stronger short- go along effect on economicgrowth. They also identify that housinginvestment has a long run impact on economic growth but not on non-housinginvestment. On the other hand, economicgrowth has a long run impact on both housing and non-housing investment. These findings suggest that housing is importationant in explaining only short-term economic cycles in econo mic growth. Chen and Zhu (2008) alsostudy the long- and short- run relationship between housing investment andeconomic growth in China. The authorslook at panel data from 1999 finished 2007.They use robust econometric tests to examine Granger causality of therelationship and find that the relationship is bidirectional in both short and long- run. In other words, in Chinaduring this period, housing investment impacted economic growth and viceversa. It will be touching to see ifthis result holds over a long-dated period where more economic cycles are includedin the data. Interestingly, therelationship is different depending on which provinces are analyzed. The eastern provinces show bidirectionalcausality like the overall results but results for other provinces showthat GDP granger causes housing investment but not vice versa.In addition to theempirical analysis of the relationship between housing and economic growth,there are some estimates of multiplier effects associated with c onstruction indeveloping countries. For example, Uy(2006) cites that for every 1 peso spent on housing activities in thePhilippines, an additional 16.61 pesos is contributed to the GDP. In genus Argentina, Freire, et. al (2006) estimatethat a 1,000,000 peso investment in construction leads to 1.8 times that addin demand. In 1995, a United Nationsstudy indicated that in most developing countries construction of low- incomehousing is labor intensive and therefore housing construction has a highmultiplier effect of between 2 and 3 times the initial investment. This arises due to the large infrastructureinvestment (roads, utilities, water, etc.) required in housing development inthose countries. . In comparison, The National Association ofRealtors model suggests that the multiplier for home sales in the U.S. isbetween 1.34 and 1.62.Erbas and Nothaft (2002)study a sample of MENA (Middle east and North African) countries. utilise parameters from the U.S. they simulatethe impact that a mendd home mortgage availability would have on housingmarkets and economic growth in these countries.They find that mortgage market reforms would increase housing unitsbuilt by 10% with a 600 basis point decline in mortgage interest rates. The impact that the increased mortgageaccessibility and housing would have on economic growth is not significanthowever. That is because they find, likeother studies, that increased investment in housing crowds out investment inother sectors. The impact on overallgrowth will be great if this housing finance helps to improve small business quotation.Housing Finance and AffordabilityDubel (2007) proposes a model where housing prices aredetermined by rents, R, growth, g, and the opportunity cost of capital, k,where P = R/(k g). The role of housing finance in this model is to reducethe cost of capital. As that cost islowered, housing prices fall and affordability of housing increases.Housing and SavingsBuckley (1996) cites several(prenominal)(prenom inal) reasons that mortgage market development can improve household savings. First, the return to housing will likely provide positive returns especially in light of rapid urbanization in developing countries. Second, housing provides the most secure collateral against market fluctuations and a positive yield over the long-run. Third, housing prices are less volatile than other addition prices. quartetteth, the availability of housing improves labor mobility and therefore employment potential. Finally, the availability of affordable housing finance may lead to increased savings as potential homeowners save to make the required down payment and to maintain their asset.While many of the work in this welkin suggests that there should be benefits to overall savings and investment arising from increased access to affordable housing, the literature does not appear to have documented these benefits empirically. This is an area wholesome-situated for further exploration.3. Housing and Job CreationThe Case of the United StatesWardrip, Williams andHague (2011) review the literature on the role of affordable housing inparticular, in creating jobs and impact local economic development in theU.S. They find that the development ofaffordable housing increases spending and employment in the surroundingeconomy. There are several models usedin the housing literature that use inputs much(prenominal) as information on the purchaseand production of goods and services for hundreds of U.S. industry sectors, thetype and procedure of businesses in a given community, and a measure of thespending associated with a given program.Given these inputs, the models output the level of economic performanceexpected for a given level of housing investment. For example, the National Association of baseBuilders uses a proprietary model to estimate the impact of building 100 newlow-income housing tax credit developments for families. The model predicts that the investment will,on average, lead to the creation of 80 new jobs from the direct and indirecteffects of construction and 42 jobs support by the induced effects ofincreased spending. In the long-term,building these units also leads to 30 new jobs that support on-going consumeractivity of the new residents.Market-rate apartment housing will create a similar amount of jobs withjust a couple of additional jobs (32) supported by households occupying the newhomes. Of course the models aredependent on the productivity of investment within the community and wouldlikely look very different across countries being considered. It will depend significantly on the amount ofskilled labor available for the construction work since 70% of the jobs createdas a direct or indirect result of the new construction, are in factconstruction jobs.Rural vs. urbanIn support of the findingsabove, in considering the impact of housing development on a rural communityseconomy, the Housing Assistance Council states that housing construction and rehabilitation have a high ratio (62.3%) of value-added to gross expendings. This means that a large percentage of theoutlay for housing construction is available to create wages and salaries, andstimulate job growth in rural economies in the U.S. The document does not compare the ratio forrural communities with that in urban communities. This is an all-important(prenominal) distinction since mostof the growth in developing countries centers around urban areas. Quigley (2008) suggests that results on therelationships between investment and economic growth may be dependent onwhether that investment is rural or urban.The author finds that urbanization promotes productivity due to increasesin specialization, centralization of knowledge, complementarities in productionand economies of home plate and scope. Ifthis is true, an investment in an urban center may produce greater economicgrowth than that same investment in a rural area. This will be an important factor in directinghousing policy and finance.Housing and Jobs in Emerging MarketsIn emerging markets thereis some data on job creation as well as the previously cited multiplier effectsassociated with construction. For example,in Argentina, Freire, Hassler, et. al (2006) estimate that a 1,000,000 pesoinvestment in construction creates some 40 jobs directly and 20 jobs indirectlyfrom services and related industries. Tipple(1994) cites many studies that find multiplier effects from housinginvestment. For example, the NationalBuilding Organization in India estimates that a $1,000,000 investment inbuilding construction leads to 600 on-site jobs and 1,000 indirect jobs. The construction abut may stimulateeconomic growth through backward bear onages (e.g. processing building materials)and forward linkages during and after the construction process (e.g.restaurants, repair shops and small scale manufacturing). However, according to Erbas and Nothaft(2002), housing construction in some developing countries is gen uinely quitecapital intensive and reliant on imported materials as a result only a smallpercentage of the labor force of these developing countries is employed inconstruction. In addition to the constructionrelated jobs, Dubel (2007) finds apositive correlation between financial and real estate related services and thehousing to GDP ratio. Specifically,during the property market upturn in Hong Kong in the 1980s and early 1990s, adoubling of the housing market share of GDP led the share of financial,insurance, real estate and business services to tercet from 6.5% to 16.3% ofGDP. Other service sectors, includingcommunity, social and person-to-person services also grew, likely as a result ofindirect inputs to construction activity as well as increased taxrevenues. 4. Housing and Its Impact on PovertyThe literature on therelationship between housing and poverty is much little than that on housingand economic growth. Hull (2009) notesthere are significant data limitations especially o n headcount poverty andlabor market outcomes. These data limitationsmake testing difficult. There is aparticular need for data in sub-Saharan Africa.Some findings can be noted and they suggest that all housing investmentis not created equal when it comes to addressing poverty. Some of these studies are highlighted here.Gutierrez et al.(2007) find strong evidence that the sectoral pattern of growth and itsemployment and productivity-intensities matter for poverty reduction. Whileemployment-intensive growth in the secondary sector (manufacturing,construction, mining and utilities) is correlated with poverty reduction,employment-intensive growth in agriculture is correlated with increases in thepoverty headcount. By extension, ifhousing creates growth in manufacturing, construction, mining and utilities, itmay be effective in reducing poverty.Similarly, Hull (2009) finds the construction sector is relativelyproductive but not in all countries.That is, construction reduces measures of p overty in some but not allcountries.Erbas and Nothaft (2002)find that low income housing has a lower import component in production andalso higher labor intensity. Thisimplies that construction of low income housing will lead to greater employmentand growth than the construction of middle or high income housing. Construction of low income housing caneffectively improve the invigoration standards of the poorer segments of thepopulation in two ways by creation of jobs and by creation of suitablehousing.Tipple (1994) reviews theliterature on the links between employment and housing development and showsthat investment in tax shelter is very effective for promoting employment,especially among lower-income groups some of the benefits to the economy tendto be inversely proportional to housing cost meaning that low cost housing ismore beneficial to the economy. Theinformal sector and small-scale enterprises tend to outperform the formalsector and larger enterprises.Housing Policy and Pov erty in evolution CountriesAs housing finance policyis considered, the housing programs and policies of local governments must beaccounted for in order to assess the potential effectiveness of housing financein different countries. For example,Malpezzi and Sa-Aadu (1996) review contemporary African housing markets and policies. They find that resource allocation in thesecountries was quite different than their intended objectives. These policies have deter housinginvestment and have been both inequitable and distortional. The authors suggest that privatization ofhousing investment is more efficient and the African governments need todisengage. Taking the example of theU.S., direct government housing production has been less efficient than privatesector tax incentives in developing affordable housing see Erbas and Nothaft(2002). Researchers and policymakers have noted thatthe housing finance systems in some countries have not been effective inreaching the low income segments of the population. For example, Moss (2004) states that in SouthAfrica the housing finance system has had little impact on the low-incomesegment of the population. Specifically,attempts to expand credit into this market through micro-loans have been characterizedby initiatives that have yet to demonstrate some form of success. The financial sector in South Africa consistsof many banks, a number of specialized finance companies and a large number ofthe so-called alternative lenders.Future studies should investigate which of these alternatives is likelyto have success in reaching the lower income segments of the population. According to Moss (2004), housing finance hasalso not been very successful in Nigeria where the interruption between income andshelter cost is very wide and has basically eliminated the low income earnersfrom the housing market. Similarly, Rahman(2009) states that the lack of available and accessible housing finance hasbeen identified by the Government of Bangladesh as o ne of the important hurdlesin improving housing conditions for middle- and lower-income households.Although several potential sources of housing finance for mid- and high-incomeconsumers exist, most of the low-income families needs are still unmet.Housing Finance in growth MarketsWhile there are differences in how housing finance occurs across developing countries, there are some similarities and shared concerns. The degree to which a countrys banks invest in mortgage lending is relatively low in developing countries when compared to developed countries. For example, Rahman (2009) cites that in Bangladesh, 4% of banking sector assets are in housing. In many countries there are state funded and/or sponsored housing finance institutions with government guarantees. However, there may be allocation problems in that loans are allocated based on politics and not on financials and the granting process can be long and inefficient. There are not as many types of mortgage instruments and in fact many countries are just beginning to grant fixed-rate mortgages which eliminate interest rate risk for the borrower. The maturity of mortgage loans tends to be shorter in developing countries 10 years is the maximum term for some mortgages in Bangladesh. In addition to state sponsored financial institutions and banks, home finance is offered by micro finance institutions. In Bangladesh, one such institution offers these loans for a term of 10 years without collateral. Although there is no collateral, the borrower must obtain title to the land and must sign a pledge to revert and obtain a group pledge to repay the loan if he or she fails to do so. These programs tend to rely on a borrowers track record, group pressure and mutual support to throw credit risk. Moss (2004) finds similarities in housing finance in South Africa and to a lesser extent, Nigeria, Ghana and Tanzania. In most of these countries, anecdotal evidence suggests that the supply of housing finance is much les s than the demand and that the institutional structures have not provided sufficient access to housing for the poor.Housing, monetary compound andPovertyOne segment of housingfinance is the secondary mortgage market and the creation of mortgageinstruments or bonds. While there hasnot been research on the development of mortgage markets and povertyspecifically, the development of those markets can be viewed as part of anoverall financial compound of the capital markets in these developingcountries. Financial deepening has beenstudied and it may serve as a proxy for the development of secondary mortgage marketsto the extent that they occur simultaneously.At any rate, the development of a secondary mortgage market would beconsistent with increasing the breadth and depth of the capital market. Therefore, a review of the relationship betweenfinancial deepening and poverty may tell something about the potential impactof mortgage market development and poverty.Consistent with this view, Malpezzi (1999) suggests that much of theworld is shifting from a housing finance perspective, where special circuitsare used to mobilize short-term household deposits for long-term mortgages, toa perspective where housing finance is integrated with broader capital markets.Buckley and Madhusudhan (1984) test a model ofthe relationship between housing investment and GDP, anticipated inflation,changes in inflation and the extent of capital deepening across severaldeveloping and transition countries.They find that, holding all else constant countries with deeperfinancial markets invest relatively more in housing. Singh and Huang (2011) analyze data from sub-SaharanAfrica between 1992 and 2006. They findthat financial deepening (as measured in part by credit to the private sectoras a percent of GDP) is associated with less poverty and income disparities inSSA countries and that this is most important in early stages of financialdevelopment. Stronger property rightsstrengthen this relat ionship. Finally,Beck, Demirguc-Kunt and Levine (2004) examine a broad cross country sample of58 developing countries and find that financial development (as measured by theratio of financial intermediation to the private section to GDP) reduces incomeinequality by disproportionately raising the incomes of the poor.Impact of Financial Deepening on theBase of the Pyramid and Absolute PoorSingh & Huang (2011) look at different definitions of poverty and examine the impact of financial deepening on them. The measures of poverty include, the headcount index which measures the percentage of the population living with per capita consumption or income below the poverty line, defined as US$1 a day. some other measure is the poverty gap which takes into account the distance of the poor from the poverty line. A third measure is the income of the poorest quintile or average per capita income of the poorest 20 percent of the population. Using each of these measures of poverty and a sample of S SA countries, the authors find that poverty is inversely related to financial deepening. The authors also look at the Gini coefficient which is derived from the Lorenz curve. Larger values of this coefficient indicated greater income inequality. For this variable the relationship between poverty and financial deepening is insignificant. In other words, financial deepening reduces absolute levels of poverty but does not impact income inequality in a significant manner in this sample of SSA countries. This suggests that various definitions should be examined to gain further insight into the relationship between housing and poverty and to capture the impact on the absolute poor.5. Housing Finance and Revenue and loving ConsequencesGovernment Revenue Links to HousingWardrip, Williams andHauge (2011) itemize revenues from housing development in the U.S. Some lessons can be learned from this data. Revenue sources during the construction phaseinclude sales taxes on building materials, cor porate taxes on buildersprofits, income taxes on construction workers, and fees for zoning,inspections, and the like. Theseestimates presume that the building materials are purchased locally, to theextent the materials are brought in from elsewhere, revenues will of course belower. This is something that willimpact housing construction in IDA countries.Revenues in the model depend on local tax structures, constructioncosts, development fees and whether the local mix of industries is conducive tocapturing construction-related activity.For example, Hangen and Northrup (2010) analyze the effects ofdeveloping and rehabilitating 582 affordable homes in Rhode Island in 2007 and2008 with $25 trillion in housing bonds.They estimate that the subsequent income, corporate and sales taxes andfees associated with the total economic activity increased state revenues byroughly $16.7 million during the development period. In an analysis of a proposed Pennsylvaniastate housing trust fund, Econsult (2009) finds that for every $1 million inproposed spending, the state stands to gain $82,000 in revenue from theconstruction of single family homes these revenues would be higher if the $1million were spent on affordable multifamily housing.In addition to immediatefiscal benefits, housing construction also provides on-going benefits to thelocality. On-going revenue sourcesinclude residential property taxes, property taxes from the businessessupported by the residents, and utility user fees. A residential development has a net positivefiscal impact only if taxes exceed the cost of providing services to theresidents. The evidence regarding thenet effect of affordable housing is inconclusive. However, there is evidence to suggest thatmarket-rate housing provides net positive fiscal impact (National Associationof Home Builders, 2009).Political Stability and HousingThere is a presumptionthat housing improves governmental stability.So far, no evidence has been found to indicate that thi s is truealthough it is a stylized fact. Provisionof housing is international law. Sachs(2011) reminds us that its a right granted in the U.N. Universal Declarationof Human Rights as follows Everyone has the right to a standard ofliving adequate for the health and well-being of himself and of his family,including food, clothing, housingand medical care There may be indirect support to the extent that therehas been evidence to indicate that housing improves education and education isbelieved to improve political stability (see evidence in next section). The relationship betweenpolitical stability and housing may go in the other direction. In other words, political instability canaffect the housing market. According toTu and Bao (2009), instability may weaken investors beliefs in propertyrights, putting the investors in dread that part of the investment may be lostdue to poor protection. Therefore,investors may pay less for the property rights when facing politicaluncertainty. Their study uses 10 yearsof data from Hong Kong and Singapore where there were differences in politicalscenarios but similar land take aim structures and property cycles. The empirical evidence supports the idea thatpolitical instability lowers property rights premiums. Education and HousingTo the extent that housingimproves homeowners get capacity, housing finance could lead to moreinvestment in human capital. Sinceinvestment in human capital may require an separate to borrow money, andborrowing money is costly, to the extent that housing finance lowers the costof borrowing, it should lead to larger investments in human capital. Many authors starting with Becker (1975) andAtkinson (1975) studied the link between investment in human capital andwealth distribution. An implication ofthese models is that income inequality will decrease as access to financeimproves. Some studies havedocumented a link between housing and education. To the extent that housing finance improveshousing affordab ility for the poor, housing finance may improve educationopportunities for the poor. Jacoby(1994) finds that lack of access to credit perpetuates poverty in Peru becausepoor households cant afford to provide their children with appropriateeducation. Jacoby and Skoufias (1997)find that without access to finance, shocks to income cause poor families todiscontinue schooling for children.Housing provides an asset that can be used to smooth shocks to income.If housing indeed improveseducation opportunities for children of the poor then by extension housing willimprove political stability. Sachs(2011) in explaining why governments should provide education, quotes AdamSmith who said, An instructed and intelligent people are more disposed toexamine, and more capable of seeing through, the interested complaints of spectral sect and seditiontherefore, the whole society is at risk when any segmentof society is poorly educated. 6. SummaryA review of the literaturepertaining to housing, econom ic growth and poverty reveals that much moreresearch is needed in order to determine the true economic benefits of housingand whether housing finance in particular can be an effective tool ineradicating poverty. The paucity ofevidence is due in part to limits in data and the need to utilize robusteconometric techniques to test for the direction of the causality in theserelationships. In other words, moreresearch needs to explore whether housing construction leads to economic growthor economic growth leads to increased demand for housing and by extensionhousing finance. Although there islittle direct documentation that housing finance improves economic standing orliving standards of the poor, some inferences can be made from the relatedliterature. The most promising evidenceis found in the financial deepening literature where it has been shown thatimprovements in financial markets are associated with reducing absolute levelsof poverty. To the extent that financialdeepening improves w ith the development of mortgage markets, then housingfinance may also be effective in reducing poverty. In addition, there appears to be solidevidence that housing construction produces jobs directly and indirectlythrough the supporting service industries.Housing is also shown to improve prospects for education and thus mayreduce income inequality. Evidenceindicates that there is no one size fits all relationship between housing,economic growth and poverty. Althoughevidence shows that housing investment impacts economic growth, thatrelationship varies within countries and over time.While not explored in depth in this review, there are some concerns regarding the impact of housing on economic development and poverty. For example, due to considerable transactions costs, some suggest that housing may reduce job mobility. In addition, while housing construction may create construction related jobs, there is a question as to whether that just crowds out investment in other sectors of th e economy. Housing finance while improving access to housing, may also increase opportunities for speculation and may lead to large booms and busts and housing cycles that may negatively impact the economy in the longer run. These and other concerns should be explored further to determine their significance.ReferencesAtkinson, A. B., 1974, The economics of variation (Oxford Clarendon Press).Banerjee, Abhijit and E. Duflo, 2011, PoorEconomics A Radical Rethinking of the Way to Fight Global Poverty, (PublicAffairs, New York).Becker, G. S., 1975, Human Capital, NBER and Columbia University Press, New York.Buckley, Robert, 1996, Housing Finance in growth Countries, (McMillan, London).Buckley, R. and R. Madhusudhan, 1984, The Macroeconomics of Housings Role in theEconomy An International Analysis, Presented to the American Real Estateand Urban Economics Association.Bunnarith, M., 2004, Between Poverty Reduction dodging and National Housing Policy, NationalUniversity of Singapore Work ing Paper.Chen, J. and A. Zhu, 2008, The Relationship Between Housing Investment and Economic Growth inChina A dialog box Analysis Using Quarterly Provincial Data, China NationalSocial Science Foundation Working Paper.Dubel, Hans-Joachim, 2007, Does Housing Finance Promote Economic andSocial Development in Emerging Markets?, Housing Finance Impact Study forInternational Finance Corporation.Econsult Corporation, 2009, Potential Economic and Fiscal Impacts of a Pennsylvania Housing TrustFund, The Housing Alliance of Pennsylvania.Erbas, S. and F. Nothaft, 2002, The Role of Affordable Mortgages in Improving Living Standards andStimulating Growth A Survey of Selected MENA Countries, IMF Working Paper.Freire, Mila, M. Gautier and O. Hassler, 2006, Review of Argentinas Housing SectorOptions for Affordable Housing Policy, populace Bank Working Paper.Guitierrez, C., et. al., 2007, Does Employment Generation Really Matter for Poverty Reduction?,World Bank Policy Research Working Paper No. 44 32, World Bank, Washington, DC.Habitat for Humanity, Consequences of Poverty Housing.Hangen, Eric, and J. Northrup, 2010, Building Homes Rhode Island An Analysisof Economic Impacts, Housing Works RI.Hongyu, Liu, Y. Park and Z. Siqi, 2002, The Interaction between Housing Investmentand Economic Growth in China, International Real Estate Review, 5 1, p. 40 60.Housing Assistance Council, 1998, The effects of Housing Development on a Rural Communitys Economy.Hull, Katy, 2009, Understandingthe Relationship Between Economic Growth, Employment and Poverty Reduction,OECD.Jacoby, Hanan, 1994, Borrowing Constraints and jump on through School Evidence from Peru,Review of Economics and Statistics, Vol. 76, 151-160.Jacoby, Hanan and E. Skoufias, 1997, Risk, Financial Markets, and Human Capital,Review of Economic Studies, Vol 64, 311-335.Karlan, Dean and J. Appel, 2011, More Than Good Intentions How a New Economics is Helping to SolveGlobal Poverty, (Dutton, New York).Leung, C., 2004, Macroecono micsand Housing A Review of the Literature, Journal of Housing Economics, 13p. 249-267.Malpezzi, Stephen, 1999, Economic Analysis of Housing Markets in Developing and TransitionEconomies, Urbanization in Transforming Economies, p. 1791-1864.Malpezzi, Stephen and J. Sa-Aadu, 1996, What Have African Housing Policies Wrought?,Real Estate Economics, Vol. 242, p. 133-160.Moss, Vuyisani, 2004, Preview of Housing Finance Systems in FourDifferent African Countries South Africa, Nigeria, Ghana and Tanzania, Centrefor Affordable Housing Finance in Africa.National Association of Home Builders, 2009, The Local Impact of Home Building in aTypical Metro Area Income, Jobs and Taxes Generated. Washington, DC.Quigley, John, 2008, Urbanization, Agglomeration and Economic Development, Commission onGrowth and Development, Working Paper No. 19.Rahman, Khandaker, 2009, Development of Housing Finance and its Impact on Socio-Economic Uplift inthe Emerging Economy in Bangladesh, IFC Bulletin No. 31.Sachs, J effrey, 2005, The End of Poverty Economic Possibilities for Our Time, (ThePenguin Press, New York).Singh, Raju and Y. Huang, 2011, FinancialDeepening and Property Rights Evidence from Sub-Saharan Africa, IMF WorkingPaper No. 11/196.Tipple, A. Graham, 1994, Employment from Housing A Resource forRapidly Growing Urban Populations, Cities 11, No. 6, p. 373.Tu, Y. and H. Bao, 2009, Property Rights and Housing Value The Impacts of Political Instability,Real Estate Economics, 372, p. 235 257.United Nations, 1995, Shelter Provision.Uy, Willie, 2006,Medium-Rise Housing The Philippine Experience, Presentation Paper for thefifth Asian Forum.Wardrip, Keith, L. Williams and S. Hague, 2011, The Role of Affordable Housing in CreatingJobs and Stimulating Local Economic Development A Review of the Literature,Center for Housing Policy.Is Prostitution a Victimless Crime? EssayIs Prostitution a Victimless Crime? EssayProstitution, as described by the Merriam-Websters Dictionary (1997), is the selling of sexual favors for money or the devoting of oneself or ones talent to an unworthy cause (p. 589). In another frame of reference, harlotry has been called a dupeless wrong offence. What exactly is a victimless crime? Wests Encyclopedia of American defines it ascrime where there is no apparent victim and no apparent pain or injury. This class of crime usually involves only consenting adults in activities such as harlotry, sodomy, and gambling where the acts are not public, no one is harmed, and no one complains of the activities (2008).This classic definition of these types of crime implies there is not any victim of the criminal expression who experiences harm. From a theoretical perspective, conflict theorists may hold that victimless crimes are established as a type of social control over morality by politically powerful people or groups who find them offensive or undesirable while functional theorists may hold that social needs, not societal power, are the underlying condit ion of labeling victimless behaviors as criminal (Greek, C.E., 2005).Why are some consensual acts considered il effectual while others are not? McWilliams (1996) asserts consensual activities prohibitions and restrictions have their basis in religion while ODonnell (2000) in addressing the price of victimless crime laws, proposes those crime laws are a form of morality control and religious persecution that uphold the opinions of the law-controlling majority with regards to race, ethnicity and political stances.The issue in victimless crimes is that society has created laws to prohibit certain types of conduct considered to be against the public interest and when supposed victims freely consent to be the victim in one of these crimes the question is whether the state should make an exception from the law for the situation. For the purpose of this paper, prostitution and the issues of concern in the legalisation of this victimless crime is explored.Upon examining prostitution as a vi ctimless crime, it seems evident there are victims at some level but most of the harm seems to be self-inflicted. flavour at the puzzle of the involved behaviors, having sex and asking for money, each by themselves are perfectly legal. Having sex with someone, even an unknown person is legal, and asking for money is legal but, when the two behaviors are linked into one single instance, a criminal act results. The two separate legal behaviors cannot constitute an illegal behavior for if no person is harmed, or if harm occurs by informed consent of the willing parties, how can it be considered a criminal act? One problematic stance presented is that consensual acts are not without risk and when adults consent to take part in the acts, why should the resulting action be deemed criminal by legal social rules? What kinds of problems can the law solve and what kind of problems does the law create?Among the many proponents of de-criminalizing victimless crimes the concept of unconstituti onality is consistently cited (Hardaway, 2000 McWilliams, 1998 ODonnell, 2000 National political platform of the Libertarian Party, 2002). A prominent vocal music critic of criminalizing these termed victimless crimes, such as prostitution, is Robert Hardaway.Hardaway is a professor of Law at the University of Denvers School of Law who has written and co-written numerous texts and articles on legal and community interest matters. Hardaways 2003 book, No Price Too High Victimless Crimes and the ninth Amendment, as cited by Cox in a 2004 review, presents a powerful and strongly-argued perspective which argues the criminalization of victimless crimes break in the Ninth Amendment to the United States Constitution (2004). Cox notes the criminalization of these crimes as well as amount of money it takes to enforce the laws are unsound policies according to Hardaway. Although, in the case of drugs, crime against property and person are related to drug use, Hardaway, per Cox (2004), attr ibutes the harm of drug use to the laws rather than the use of drugs themselves. According to Cox, Hardaway uses the example of Prohibition to explain the supply and demand concept of the argument stating crime and violence do not emanate from some physiological effect of the drug, but the drug laws themselves and with the decriminalization of drugs, neighborhood drug dealers would be put out of business effectively breaking the business-end of organized crime (105). Hardaway further posits, according to Cox, legalizing personal vices is justified by a considered weighing of the costs and consequences of criminalization (30), (2004).ProCon.org has a website which addresses the issue of whether or not prostitution should be legalized and many statements were provided on this website of both the pro and con sides of the issue No persons human or civil rights should be scandalized on the basis of their trade, occupation, work, calling, or profession Prostitution Education Network, 199 6 prostitution violates the right to physical and moral integrityviolates the prohibition of torture and of cruel, inhuman or degrading treatment.. Hoffman, C., 1997 prostitution laws area violation of the right of individual privacy because they impose penal sanctions for the private sexual conduct of consenting adults American courteous Liberties Union, 2007 few activities are as brutal and damaging to people as prostitution U.S. Department of State, 2004 (ProCon, 2009).Of all opposition members, the most prominent is Melissa Farley, a research and clinical psychologist at the San Francisco non-profit organization, Prostitution Research and Education. Farley has written numerous peer-reviewed articles on the subject (Farley, M., 2006). Farleys numerous research articles provide a well-rounded look at the subject matter of prostitution, the sex industry, exploitation of women, as well as the myriad of troubling issues arising from when men purchase women in prostitution. In the 20 06 article, Prostitution, Trafficking, and Cultural Amnesia What We Must Not Know in Order to play along the Business of Sexual Exploitation Running Smoothly, Farley posits prostitution is sexual violence that results in massive economic profit for some of its perpetrators and is a much like slavery in that it is a lucrative form of oppression (p. 102). Farley goes further to remark on prostitutions legal status (legal, illegal, zoned, or decriminalized) or the location of the activity (strip club, massage parlor, street, and escort/home/hotel) the danger to women is still tremendous (p. 103). Farleys discussion on the peer-reviewed literature which documents the violence so prevalent in prostitution and states wildness is common turn up in prostitution whether it is legal or illegal (p. 106). Citing a Canadian commission on prostitution and pornography which reported the death rate of women in prostitution as forty times higher than that of the general population and a 2001 Vanco uver prostitution research study by Cler-Cunningham and Christensen which reported a thirty-six percent incident of attempted murder, Farley contends prostitution can be lethal (p. 107).Farleys detailed look at legalized and illegal prostitution can impact the perception of the sex industry as a whole. However, within the United States Constitutions first ten amendments, also known as the Bill of Rights, are aliment which may present a strong argument for abolishing criminalizing prostitution and other victimless crimes.The First, Fourth, Fifth, and Ninth Amendments are of particular interest in this dialogue of supporting the decriminalization of prostitution. Although victimless crimes such as prostitution are not specifically addressed in the Constitution there seems to be an arguable position that victimless crime laws violate First Amendment restrictions against laws respecting an establishment of religion especially since religious and moral values seem to provide the foundat ion for many of the laws.The Fourth Amendments provisions on search and seizure seems to be violated by such devices as warrantless search and seizures which are often utilized to obtain evidence for prosecutorial purposes. The privacy of innocents can be threatened as enforcement of the law requires police and investigators to engage in extensive monitoring, wiretapping, and surveillance of suspects and the public. Some people believe that these warrantless search and seizures and victimless crime laws are a means of political power over selected portions of the population which are unequally enforced against the poor and minorities thereby violating the due process clause of the Fifth Amendment (Kruttscnitt, 1984 McWilliams, 1998 Nussbaum, OConnell, 2000 1999 Schur, 1971, 1980, 1983).The Ninth Amendment to the United States Constitution has direct bearing on such modern day constitutional issues such as abortion, gay rights, and the right to die. Farber (2007) considers the Ninth Amendment the key to understanding the liberties Americans were to enjoy under the Constitution as envisioned by the Founding Fathers describes the purpose of the Ninth Amendment and the Founders intent to protect the rights the Founders assumed but failed to name or specify in the Bill of Rights. Like the rest of the original Bill of Rights, per Farber, the Ninth Amendment only limits federal power rather than state government powers. The Fourteenth Amendment came along later and addressed the state government and within that Amendment the Privileges or Immunities Clause is paired with the Ninth Amendment (Lash, 2004 Farber, 2007).America is in first place in the world for the number of incarcerated individuals as highlighted by a Pew Center report that found 1 in every 100 American adults are behind bars with its prison population having tripled in the last 20 years. Spending on prisons has more than quadrupled and the American taxpayers are slowly crush by this wasteful spendin g. At an average cost of over $19,000 per prisoner, taxpayers are facing a bill of over $44 billion per year to move on people locked away (Pew, 2004).Coinciding with this rising prison population is the increase in the number of private prisons which increased from five in 1995 to 100 in 2005. Herivel and Wright ( ) in their book Prison Profiteers-Who Makes Money From Mass Incarceration reports private prison industry has seen increased profits and lobbied extensively for more frequent and longer prison sentences and traces the flow of monies designated for the public good and ends up in the pockets of enterprises dedicated to keeping prison cells filled (From their book jacket).History has shown that criminalizing victimless crimes will drive the practice underground where violence, extortion, and coercion are most likely to thrive. This was particularly noticed when the 18th Amendment and later the Volstead Act, 1919, which made it illegal to manufacture or sell beer, wine, or o ther intoxicating malt or vinous liquors it was not illegal to possess it for personal use. The prohibition, originally intended to reduce beer consumption in particular, actually a failure and ended up increasing hard liquor consumption and created a new business, bootlegging, defined as the unlawful manufacture, sale, and transportation of alcoholic beverages without registration or payment of taxes which became widespread and a staple of organized crime (Prohibition).Almost every individual has the ability and moral capacity to judge what is helpful or harmful to them and it does not make sense for other people to dictate what choices should be made. When individuals commit acts harmful to themselves, the action should be termed as immoral, not illegal. The criminalization for the act of prostitution should not be determined by social effects of an individuals actions or by the moral or religious views of society. Every person needs freedom to make choices and accept the consequ ences for without these consequences, growth and experiential development will be hindered.If an adult man-or an adult woman, wants to engage in sexual relations with another adult man or woman who charges a fee for his or her services, they should be able to do so without the fear of being guilty of a crime. It does not mean that prostitution should not be subjected to certain legal requirements such as health laws. Removing prostitution from criminal statutes and providing a designation as a business entity subjected to business requirements, prostitution can be taxed, sex workers can obtain health and safety rights other employees have, and problems of execration and graft associated with police jurisdiction of such a business can be dealt with more effectively with better protection from violence and abuse for those individuals who work within the industry. In a 2001 article written for the New Zealand Herald, Sue Bradford, MA, Member of New Zealands Parliament says it best pro stitution has been a passage option for some people since history began. Nothing any law has done has changed or will change thatI believe we would all be better off to accept the job choice that some adults make as valid and worthy of care and compassion for all our sakes (2001).Work CitedBradford, S. (2001). discourse Sex workers deserve protection of the law. New Zealand Herald. July 30, 2001.Cox, G.C., (2004). Book review of Hardaway, R. (2003). No price too high Victimless crimes and the Ninth Amendment. Department of Political Science, University of North Texas.Farber, D.A. (2007). well-kept by the people The silent Ninth Amendment and the Constitutional rights Americans dont know they have. Perseus Books.Fyffe, C. and Hardaway, R.M. (2003). No price too high Victimless crimes and the Ninth Amendment. Westport, CN Praeger.Greek, C.E., (2005). Criminological theory. Lecture notes. CCJ 5606. http//www.criminology.fsu.edu/crimtheory/Hayes-Smith, R. and Shekarkhar, Z. (2010). Wh y is prostitution criminalized? An alternative viewpoint on the construction of sex work. Contemporary Justice Review, March 2010, muckle 13 Issue 1, p. 43-55.Herivel, T. and Wright, P. (2007). Prison profiteers Who makes money from mass internment? New York New PressKruttschnitt, C. (1984). Labeling women deviant Gender stigma and social control. Contemporary Sociology. 13 (5), 596.Lash, K.T. (2004). The lost original meaning of the Ninth Amendment. Texas Law Review, Volume 83, Number 2, December 2004McWilliams, P. (1998). Aint nobodys business if you do The absurdity of consensual crimes in a free society. Los Angeles, CA Prelude Press. http//www.mcwilliams.com/books/aint/201.htmMerriam-Webster Dictionary (1997). Springfield, MASS Merriam-Webster, Inc.National Platform of the Libertarian Party, 2002. (Adopted at the July 2002 convention in Indianapolis, Indiana)Nussbaum, M. C. (1999). Sex social justice. New York Oxford University PressODonnell, T. (2000). American holocaust Th e price of victimless crime laws. Writers Digest. Iuniverse.comProCon, 2009. Prostitution Education Network, 1996 Hoffman, C., 1997 American Civil Liberties Union, 2007 U.S. Department of State, 2004. http//prostitution.procon.org/view.answers.php?questionID=1315print=trueProhibition. http//www.u-s-history.com/pages/h1085.htmlSchur, E. (1971). Labeling deviant behavior. New York Harper and Row.(1980). The politics of deviance. Englewood Cliffs Prentice Hall.(1983). Labeling women deviant gender, stigma, and social control. Philadelphia Temple University Press.Wests Encyclopedia of American Law, Edition 2 (2008). The Gale Group, Inc.