Taming a Monstrous Hybrid: Social Welfare Effects of Privatizing Public Housing in Sweden

Sammanfattning: Within the Swedish housing sector, sales of public housing to private actors have been an occurring phenomenon for almost three decades, but the effects of such privatizations on social welfare are still subject to political debate. In this thesis, I evaluate how privatization in the contemporary Swedish housing market affect social welfare through its effects on criminality, citizen satisfaction and economic inequality. A fixed-effects regression model with finite distributed lags, and a panel dataset with 290 Swedish municipalities over the years 2013-2018, allow me to study the causal effects of privatization on the chosen parameters of social welfare. I find that privatizations show a negligible aggregate effect on criminality after the first two years, but lead to a decreased aggregate level of criminality when the effects are studied over a three year period. The results further show that privatization leads to increased perceived quality of housing, but also to potential long-term increases in economic inequality. The results shed light on whether the gains of reduced public ownership can outweigh its potential losses within the Swedish housing system, and contributes with new empirical evidence on how privatization affects social welfare in the context of the Swedish contemporary housing market.