UCL Department of Economics


IFS Seminar - Tarun Ramadorai (Imperial College)

28 June 2023, 12:30 pm–1:45 pm

Books in library

A Bad Bunch: Asset Value Under-Reporting in the Mumbai Real Estate Market

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Carole Reginer

Abstract: Real-estate values are often under-reported to evade taxes and hide illicit wealth. We develop a new method to estimate under-reporting, and employ it on large, granular administrative data from the Mumbai real-estate market. The approach compares bunching of reported values around government-assessed guidance values with the distribution of a third-party measure of market values. We estimate that 11 percent of Mumbai real-estate value is under-reported between 2013 and 2022. Bunching declines post-demonetization, but there is no discernible change in the overall under-reporting rate. Properties with mortgages from banks with high non-performing assets and from public-sector banks exhibit greater under-reporting.