We analyze by far the most extensive data base yet employed in estimating capitalizationquot; of below-market interest rates into asset prices: nearly 300,000 sales of owner-occupied homes inquot; Sweden from 1981 to 1993 with 40,000 including government subsidized interest rates. Ourquot;...

During the last quarter century, mortgage interest deductibility has been gradually phased out. In 1974 a ceiling was set on the size of the mortgage eligible for interest deductibility (oelig;30,000 since 1983) and, beginning in 1993, the maximum rate at which interest under that ceiling could...