Analyze the role played by capital gains in the formation of house prices and how taxation of such gains may reduce the volatility of prices, stabilize the housing market, and generate revenue. Construct a theoretical apparatus with two types of buyers, f irst-time and nth time, and examine different outcomes based on different assumptions on the use of realized equity and the demand for housing. Derive explicit formulations for how capital gains taxes affect the equity multiplier effect. Establish two typ es of data sets, one cross-sectional macro aggregate type and one longitudinal micro panel type. Study both the indicators based on the former and the behavior observed from the latter, and estimate tax revenue from a capital gains tax. Collaborate with p rofessor Beatty on developing the optimal tools with which to study the micro panel.