housing prices and the savings of renters abstract this paper studies the effects of housing prices on the net worth of young households because prospective homeowners must accumulate down payments a change in housing prices can change their savings patterns theoretically the effect of increases in house prices on savings is ambiguous because households can increase their saving to afford the larger down payment or decrease their saving because they have chosen to delay or forego purchasing a house using data from the 1984 panel study of income dynamics 27 i show that empirically the effect of increased housing prices on saving is positive and quite large relative to the savings of young households young renter households living in cities with high housing prices have more net worth than those living in cities with lowering housing prices controlling for both the income of the households as well as the per capita income of the city in which they live

housing choices and uncertainty the impact of stochastic events abstract in our model a household recognizes that family size is stochastic when making its tenure and housing consumption decisions it also recognizes that initial choices constrain later behavior because they affect the amount of savings simulations of the model show that housing consumption and the duration of stay in a residence are sensitive to whether the realization of the stochastic event is the expected value based on this observation we suggest that empirical housing studies should include both the expected and realized values of stochastic explanatory variables we find few behavioral responses to changes in the variance of an uncertain event even though increased uncertainty is passed through to after tax income and the user cost of owning a notable exception is that if a household knows that a change in an influential variable will occur but it does not know the direction of change it is more likely to rent initially

permanent income hedonic prices and demand for housing new evidence abstract housing demand is examined by looking quite specifically at the income and price variables based on individual household data permanent and transitory incomes are computed through instrumental variables related to human and nonhuman wealth a price is constructed by spatially varying hedonic techniques separation of measured income into permanent and transitory components substantially improves the predictive power of the housing demand estimation and leads to demand elasticities of 1 and 1 with respect to permanent income and price the permanent income elasticity is roughly twice the measured income elasticity

the dynamics of real estate prices institute of university of i business and v california at i economic research berkeley fisher center for real estate and urban economics p working paper series working paper no 88 151 the dynamics of real estate prices by these papers are preliminary in nature their purpose is to i e z i d 2f iz e ey bradford case are nottobccited ortluotedin john mq quigley any publication without the ex press permission of the author walter a haas school of business

transaction taxes in a search model of the housing market abstract we incorporate transaction taxes in a housing market search model with endogeneous house prices and show that these taxes unambiguously create lock in effects that reduce welfare the lock in effects are larger at low vacancy rates seller taxes raise prices and buyer taxes lower them and this asymmetry helps to explain the differences in the welfare effects of the two taxes lock in effects are smaller with a buyer tax since the price reduction dampens the negative effect on search effort caused by the tax

safe and satisfied external effects of homeownership in rotterdam the article analyses the impact of homeownership on neighbourhood safety and neighbourhood satisfaction using a unique panel dataset for the city of rotterdam the results show that there are significant but economically small effects of homeownership on safety and satisfaction moreover the relation between ownership and satisfaction is significantly moderated by neighbourhood safety the paper examines whether the marginal impact of increases in homeownership on external effects diminish once ownership levels are higher according to the data this seems to be the case the results are robust to alternative specifications the findings provide insights for the evaluation of housing market policies that subsidise or stimulate homeownership

intergenerational transfers borrowing constraints and saving behavior evidence from the housing market abstract we examine the effects of intergenerational transfers on saving behavior by analyzing transfers targeted to first time home purchases transfer recipients have a shorter time to save for a down payment of 9 20 for each dollar of transfer received total savings falls by 29 40 cents and the down payment rises by 61 71 cents transfer recipients increase the value of the home purchased but by an amount that is much lower than possible if the transfer were fully leveraged in addition transfers appear to help households achieve certain down payment thresholds that give favorable mortgage terms

which are the real determinants of tenure a comparative analysis of different models of the tenure choice of a house tenure choice is closely bound to other vital individual decisions of great importance not only for the individual but also for the country in which he or she resides the present paper includes a comparison of the different approaches that have been used in the economic literature in the analysis of the individual s housing tenure choice according to their dependent variable the different models can be divided into those whose dependent variable is tenure classical models recent movers models and sequential models and those in which the dependent variable is transition from renting to the position of ownership duration models and choice based models results show the best performance for the models in which the variable to be explained is the transition from renting to ownership and highlight real determinants of tenure life cycle variables and transition life cycle variables prices and transaction costs finally marital status stands out as the variable with the highest incidence

housing tenure and labor market impacts the search goes on abstract we develop two search theoretic models emphasizing firm entry to examine the oswald hypothesis the idea that homeownership is linked to inferior labor market outcomes and compare their predictions to three extant theories the five models have surprisingly different predictions about the labor market at both the aggregate and micro levels using a suitable instrumental variable strategy we estimate both micro and aggregate level regression models of wages and unemployment and compare the estimates to those predictions we find that while homeowners are less likely to be unemployed they also have lower wages all else equal compared to renters in addition higher regional homeownership rates are associated with a greater probability of individual worker unemployment and higher wages the outcome of a horserace between our new search theoretic models is mixed the wage posting model predicts observed unemployment impacts while a bargaining variant does a better job explaining observed wages and aggregate labor market outcomes overall we conclude that firm behavior is important for understanding the labor market impacts of homeownership because this is the case regional homeownership rates are not good instruments for individual tenure choice in empirical work and while individual homeowners may have inferior labor market outcomes as compared to renters from the viewpoint of society higher homeownership rates may result in greater job creation and overall production among other benefits

the impact of transaction costs and the expected length of stay on homeownership abstract economic theory suggests that an increase in the expected length of stay in a dwelling increases the probability of a household choosing to own a house rather than rent this hypothesis is derived from recognition that there are substantial transaction costs associated with homeownership and increased expected time in the home reduces the annualized transaction cost using a military data set we confirm that expected length of stay in a dwelling and the transaction costs of selling are very important to the ownership decision our best estimate of the transaction costs of selling a home are the sum of 3 of house value and 4 of household earnings

allocation inflexibilities female labor supply and housing assets accumulation are women working to pay the mortgage this article uses data from the 1986 canadian family expenditures survey to estimate a life cycle consistent model of household labor supply and commodity demand that incorporates a mortgage qualification constraint based on earnings both the parametric and nonparametric implications of the model suggest that the labor supply of a nontrivial percentage of married women is constrained by mortgage commitments the results of generalized selectivity models of female labor force participation and labor supply show that the positive effect of a high debt service ratio exceeds the negative effect of young children

measuring the importance of location in house price appreciation abstract this paper examines the variation in the rates of price appreciation within an individual metropolitan market a methodology is developed to examine the locational variation in house price changes in dade county miami florida from 1971 to 1992 house price appreciation appears to be somewhat spatially related that is it varies by municipality with distance from the cbd with local changes in population and housing units and by ethnic mix however these relationships have minimal explanatory power controlling for the census tract group location of each home explains only around 12 of the residual variation in the appreciation of individual homes that is not explained by metropolitan wide changes in house prices the effect of tract group location appears to be dominated by the idiosyncratic influences of individual homes and their immediate environments

tax subsidies and household saving evidence from canada targeted tax based saving incentives can be a powerful tool for promoting household and national saving this study examines the effect of the cancellation of the registered home ownership savings plan rhosp a canadian tax subsidized saving program on household saving the cancellation provides exogenous variation in eligibility for the subsidy that is uncorrelated with householdspecific heterogeneity in saving behavior the empirical analysis suggests that the subsidy had a substantial impact on saving each dollar contributed to the program represented 56 93 and 20 57 cents of new household and national saving respectively

equity and time to sale in the real estate market evidence from the boston condominium market of the early 1990s reveals that an owner s equity position determines his experience as a seller an owner of a property with a high loan to value ratio sets a higher asking price has a higher expected time on the market and if he sells receives a higher price than an owner with proportionately less debt the down payment requirement for purchasers but not incumbent owners provides a simple explanation for this phenomenon among owner occupants the results provide supporting evidence for equity based aggregate theories of price volume movements in the housing market copyright 1997 by american economic association

health reform health insurance and selection estimating selection into health insurance using the massachusetts health reform approximately 49 9 million people in the united states lack health insurance denavas walt proctor and smith 2011 one potential driver of uninsurance is asymmetric information on health risk between insurers and the insured asymmetric information can distort available insurance contracts as in rothschild and stiglitz 1976 or it can raise premiums for the relatively healthy as in akerlof 1970 both distortions result in in efficiently low levels of insurance coverage predicated at least in part on concerns about adverse selection the state of massachusetts passed health reform in april 2006 aimed at achieving near universal health insurance coverage the massachusetts approach is considered a model for national health reform the patient protection and affordable care act ppaca signed in march 2010 a central feature of both reforms is a mandate that individuals obtain health insurance or pay a penalty the massachusetts mandate allows us to examine whether there was adverse selection into health insurance before the reform in contrast existing literature generally examines adverse selection among employer sponsored plans e g cutler and reber 1998 einav finkelstein and cullen 2010 which is less relevant for policy our simple empirical methodology is based on the observation that the direction of selection depends on the difference between the cost of the marginal enrollee and the cost of those who already have insurance if the cost of the marginal enrollee is below the average cost of those who are already insured selection is adverse if the cost of the marginal enrollee is above the average cost of those who are already insured selection is advantageous therefore as demonstrated by einav finkelstein and cullen 2010 the sign of the slope of the average cost curve captures selection we use the massachusetts reform to provide an exogenous shift in coverage that identifies the slope of the average cost curve we find that counties with larger increases in coverage over the reform period face the smallest increase in average hospital costs for the insured population consistent with adverse selection into insurance before reform additional results that incorporate cross state variation and data on health measures provide further evidence for adverse selection

the tenure transition decision for elderly homeowners abstract there exists evidence of a sizable shift of elderly households away from homeownership the paper explores two sets of potential determinants of this decision one set derives from the life cycle hypothesis a second set is intended to apply to households that do not conform to the predictions of life cycle theory the results from estimating a tenure transition likelihood function provide some support for each set of explanations in particular they suggest that it is premature to dismiss the role of life cycle hypothesis behavior in explaining the decision of elderly households to terminate homeownership

rehabilitation decisions in rental housing an empirical analysis abstract housing policy makers show increased interest in encouraging rehabilitation of the existing housing stock but little is known about what factors influence the decision to invest particularly in rental housing making policy design difficult this paper presents an empirical analysis of individual landlords housing rehabilitation decisions in one housing market the analysis tests hypotheses about the impacts of detailed neighborhood structure and site characteristics on each owner s investment activity findings support the general hypothesis that economic returns to investment have a major effect on rehabilitation decisions identify some other important circumstances and suggest which among many specific policy levers should be effective

estimating the consumption and investment demands for housing and their effect on housing tenure status theoretical work suggests that families live in owner occupied housing if their investment demand for housing exceeds their consumption demand for housing using household data from the 1983 survey of consumer finances the authors test this theory by estimating an ordered probit model of whether families rent without owning property rent while owning property other than their home own their home without owning other properties or own their home in addition to other properties for owner occupiers who own additional property both the investment and consumption demands are directly observed enabling the authors to separately identify these functions copyright 1994 by mit press

why is taiwan s homeownership rate so high with an annual growth rate of 0 62 per cent since 1980 taiwan s homeownership rate reached 88 per cent in 2007 this study explores possible causes of taiwan s high homeownership rates the instit

policy reform and labour demand in branches of sri lankan manufacturing industry many policy reforms in developing countries aim to remove factor market distortions whether such reforms reduce unemployment depends partly on the substitution possibilities between labour and other factors of production this paper examines labour demand in seven branches of sri lankan manufacturing industry using data on 4 digit industrial categories over the 1990 to 1997 period the box cox transformation is used to allow for flexible and data dependent elasticities the elasticity of capital labour substitution varies widely across the branches of industry and is usually variable rather than constant the average long run own wage elasticity of labour demand for the manufacturing sector is estimated as 0 80 so factor price policy should have an important effect on labour demand in this setting

do council housing policies reduce migration between regions data from the 1973 general household survey of great britain are used to examine whether the council house system which currently provides a dwelling for one british family in every three tends to discourage long distance migration controls are introduced for various socioeconomic variables and the importance of occupation sector of employment age and education in explaining migration is discussed comparisons are also made between local movements and long distance migration the findings indicate that over longer distances council tenants have much lower migration rates than owner occupiers

low income homeownership american dream or delusion summary this paper is a critical analysis of recent us policy to promote low income homeownership it examines the ideology and assumptions buttressing this policy evidence on the effects of low income homeownership and the viability of homeownership as a strategy for low income families evidence suggests that the prospect for sustained growth in low income homeownership may be limited research does not provide uniform support for it as a tool for asset accumulation neighbourhood economic development or other social and political goals alleged effects of homeownership may be artefacts of self selection and the conflation of homeownership with unobserved characteristics coincident with buying homes what homeownership does and why are not well understood because of difficulties disentangling what homeownership means the elevation of low income homeownership to its current status has deflected political attention away from alternative policies for affordable housing

a debt owing democracy the political impact of housing market recession at the british general election of 1992 the 1992 british general election took place in the context of a severe housing recession which hit hardest in those regions from which the government usually drew much of its electoral support the slump notwithstanding however the government went on to win its fourth successive election victory the paper investigates the impact of the housing recession on the geography of the vote at the 1992 general election party fortunes were linked to local housing market conditions and the failure of the housing market was a factor in reducing support for the government negative equity is identified as a particularly important problem in this regard

housing decisions of american youth abstract prior studies of household tenure choice have not accounted for possible simultaneity with household formation and labor supply decisions we address these methodological issues and introduce new measures of the relative cost of homeowning and potential earnings capacity we also estimate the demand for the quantity of owner occupied housing accounting for the limitation of the sample to those choosing to live alone and be homeowners potential earnings and housing rental costs affect young adults decisions of whether to live alone as single or married or with parents or some other group of adults tenure choice is influenced by wealth the relative cost of homeowning and a number of demographic variables housing demand depends on owner costs elasticity near 0 5 and potential earnings elasticity near 0 5

social security and elderly homeownership abstract over the last twenty five years the homeownership rate of households 65 years and older has risen steadily while the homeownership rate for 35 64 year old households has remained relatively unchanged at the same time the real value of social security benefits has risen substantially using data from the march 1978 to 2001 current population surveys this paper documents the evolution and assesses the causal role of the social security program in increasing elderly homeownership to isolate the causal effect the analysis develops an instrumental variable approach that relies on the large variation in benefits for birth cohorts from 1900 to 1930 due to double indexation of the system and the so called social security notch for all elderly the estimated elasticity of homeownership to social security benefits ranges from 0 26 to 0 49 across marital groups the widowed have the greatest responsiveness to benefits increases in benefits also increase household formation among the elderly overall the estimates indicate that between half and as much as all of the time series rise in elderly homeownership over the last twenty five years can be attributable to the rise in social security benefits and suggest that reductions in benefits would alter homeownership among the elderly significantly

home ownership and unemployment in the us in this paper we scrutinise oswald s evidence that home ownership and unemployment are correlated across the us states in order to abstract from state fixed effects in levels we analyse the cross sectional variation in changes in home ownership and unemployment rates between 1970 and 1990 after duplicating nearly oswald s result we illustrate the importance of weighting the state observations by the fraction of total us households in 1970 that resided in the respective states and of abstracting from the ageing of the population between 1970 and 1990 this causes oswald s correlation to to disappear secondly we estimate the relationship for six different age classes and for household heads and total population we find that the relationship is non existent for both young households and old households but exists for middle aged households young households have accumulated little wealth and have had less time to become attached to the geographical area than middle aged households and thus are more

cross tenure differences in home maintenance and appreciation this paper investigates the relative maintenance levels of owner and renter occupied housing by examining their short and long run appreciation rates we modify the standard repeat sales estimation procedure to test whether owner occupied housing appreciates faster than renter occupied housing this procedure holds constant all structural factors except for aging hence appreciation is estimated net of physical depreciation i e routine aging deficient and deferred maintenance we find only weak evidence to support the notion that long term rates of appreciation and maintenance levels are substantially different between owner and renter occupied housing

an analysis of female labor supply housing demand and the saving rate in japan abstract the paper considers household savings the labor supply of married women and the demand for housing within a unified framework using the cross section data with 8 000 observations we estimate the saving and labor supply functions by the method which takes explicitly into account a change in tenure choice our results show for example that a rise in land price raises the saving rate for those who keep housing purchase plans but lowers it among those who give up the plans we also discuss the implications of these findings for the aggregate saving rate in japan

interest rate variations mortgage prepayments and household mobility the volatility of interest rates and the deregulation of the mortgage lending sector have meant that many homeowners also own mortgages at terms more favorable than current interest rates this paper presents a model of residential mobility decisions and an empirical analysis that evaluates the importance of the ownership of these mortgages upon the mobility of homeowners the results based upon proportional and nonproportional hazard models indicate that these effects are quite large the empirical analysis distinguishes between different regulatory regimes that govern the assumption of existing mortgages and indicates the implications of these findings for the pricing and valuation of mortgage backed securities copyright 1987 by mit press

capital gains taxation and residential mobility in sweden abstract theoretical studies have shown that capital gains taxes in the housing market may create lock in effects but so far no empirical evidence has been presented regarding the size of these effects for a panel of swedish house owners in 1984 1990 we show that lock in effects only appear for households with income reductions the size of these lock in effects crucially depends on the magnitude of the income loss the theoretical model and features of the swedish tax system imply that lock in effects depend on the degree of mismatch in the current residence and whether the households buy up or buy down

how property markets determine welfare outcomes an equilibrium sorting model analysis of local environmental interventions this paper examines the pivotal role played by property markets in determining the magnitude and distribution of welfare changes resulting from localised environmental change we address that issue using an equilibrium sorting model esm calibrated by way of example to the circumstances of a road infrastructure project in the english town of polegate previous esm research has tended to assume that all households rent property from a fixed property stock the narrative that arises from those models concerns environmental gentrification wherein access to environmentally improved locations is appropriated by the relatively wealthy through their ability to out compete the less wealthy in the rental property market our research shows that to be only part of a much more complex story we develop a model that extends the sophistication with which esms replicate property market dynamics allowing for households to choose whether to rent or purchase their home and introducing greater realism into housing supply responses to changing market conditions our research shows that property markets redistribute welfare gains across the population in complex ways in which tenure choice and housing supply constraints play central roles

the allocation of capital between residential and nonresidential uses taxes inflation and capital market constraints we have constructed a simple two sector model of the demand for housing and corporate capital economic growth and an increase in the inflation rate were then simulated with a number of model variants the model and simulation experiments illustrate both the tax bias in favor of housing and the manner in which the increase in inflation between 1965 and 1978 magnified it the existence of capital market constraints offsets the bias against corporate capital but it introduces a sharp inefficient reallocation of housing from less wealthy constrained households to wealthy households who do not have gains on mortgages and are not financially constrained

homeownership neighbourhood characteristics and children s positive behaviours among low and moderate income households using data on low to moderate income households in the us community advantage program survey this paper examines homeownership neighbourhood characteristics and the interaction between the two on

imputed rental income taxation and income distribution in finland in most western countries owner occupied housing is tax favoured compared with other investments and housing tenure modes this paper analyses the effects of imputed rental income and its tax treatment on income distribution in finland using household data from the 2004 wealth survey produced by statistics finland it is found that imputed rental income has a major effect on homeowners well being as it constitutes on average almost 10 per cent of homeowner households disposable income furthermore including imputed rental income in household disposable income decreased overall inequality measured by the gini index the tax subsidy resulting from non taxation of imputed rental income is skewed towards high income households however the effects of a new tax on imputed rental income on overall inequality would depend vitally on the way the increased government tax revenue is transferred back to the households

houses and or jobs ownership and the labour market in belgian districts isebaert d heylen f and smolders c houses and or jobs ownership and the labour market in belgian districts regional studies a j oswald argues that high rates of homeownership may imply inferior labour market outcomes using a panel of forty two belgian districts since the 1970s and accounting for other key determinants of employment this paper confirms the oswald hypothesis a 1 percentage point rise in the rate of ownership in a district implies a statistically significant fall in the employment rate by about 0 35 percentage points this negative effect declines in the fraction of the high skilled in a district the results underscore the importance of controlling for unobserved district specific fixed effects and common time effects and of appropriately dealing with endogeneity

tenure choice and expected mobility a synthesis abstract this study employs a joint logit probability model to estimate the effects of a vector of independent variables on the household s current tenure choice and expected mobility which are hypothesized to be simultaneously determined in the empirical analysis it was found that the coefficient on the endogenous variables tenure choice and expected mobility is the most highly significant of all the coefficients estimated in addition in previous analyses the age of the household head has always exhibited a highly significant positive effect on the probability of ownership however in this analysis it is demonstrated that this age variable was acting as a proxy for the expected mobility and wealth of the household

the dispersion of us state unemployment rates the role of market and non market equilibrium factors partridge m d and rickman d s 1997 the dispersion of us state unemployment rates the role of market and nonmarket equilibrium factors reg studies 31 593 607 european nations particularly the uk have been observed to have persistent dispersion in regional unemployment rates the dispersion is often hypothesized to be caused by centralized collective bargaining and government policies that limit regional labour market adjustments although the us labour market is considered more exible possessing higher rates of labour mobility and less government mandates there also is persistent dispersion in us state unemployment rates this paper investigates the factors that underlie the persistent dispersion in us state unemployment rates the factors examined include amenities crime education home ownership and residency patterns industry composition and international migration partridge m d et rickman d s 1997 la dispersion des taux de chomage aux etats unis sur le plan des etats l importa

explaining the vote for slow growth a model of equilibrium rent determination is developed to incorporate both the scarcity and amenity effects associated with limits to new housing construction in a non open city where demand for housing has increased implications of the model are tested with data from california cities to determine which factors increase the probability that a local growth control ballot measure is proposed or passed it is found that limits to new housing development occur with greater frequency in communities where fewer substitute cities exist and where certain socioeconomic characteristics predominate but not where current population densities or growth are high

the impact of income inequality on rental affordability an empirical study in large american metropolitan areas american metropolitan areas have experienced rising income inequality and worsening rental affordability in the past few decades has the rise of inequality caused worsening rental affordability t

racial discrimination and redlining in cities we propose a model where employers have two types of prejudices racial and spatial discriminations because of the rst one black workers have less chance than white workers to nd a job because of the second one workers living closer to the city center have less chances than suburban workers to nd a job in this context we show that depending on the importance of access costs to employment centers two urban equilibria may emerge in equilibrium 1 the access cost for blacks is quite large black and white workers are totally separated while in equilibrium 2 the access cost for blacks is relatively small workers are separated by their employment status the unemployed versus the employed we then study the labor market equilibrium and its interactions with the land market we show in particular that both race and space matter to explain high unemployment rates among blacks

the mortgage interest deduction and its impact on homeownership decisions abstract this paper examines the impact of the combined u s state and federal mortgage interest deduction mid on homeownership attainment using data from 1984 to 2007 and exploiting variation in the subsidy arising from changes in the mid within and across states over time we test whether capitalization of the mid into house prices offsets the positive effect on homeownership we find that the mid boosts homeownership attainment only of higher income households in less tightly regulated housing markets in more restrictive places an adverse effect exists the mid is an ineffective policy to promote homeownership and improve social welfare

a note on the benefits of homeownership abstract this brief note adds to recent work that attempts to identify externalities associated with homeownership the results suggest that some of the homeownership effect found by green and white is driven by family characteristics associated with homeownership especially residential stability however as much as homeownership increases residential stability it appears to be correlated with higher school attainment attempts to control for endogeneity cannot eliminate this finding

homeownership and investment in risky assets abstract this paper uses the 1989 survey of consumer finances to show that committed expenditures related to homeownership cause agents to hold their financial assets in a safe form this work follows theoretical results by fratantoni 5 which show that the mortgage commitment leads to reduced risky asset holding and empirical results by guisoet al 7 which show that agents with uncertain labor income hold fewer risky assets i find that doubling the median homeowner s mortgage payment income ratio leads to a 15 decrease in the risky share

estimating welfare in insurance markets using variation in prices we provide a graphical illustration of how standard consumer and producer theory can be used to quantify the welfare loss associated with inefficient pricing in insurance markets with selection we then show how this welfare loss can be estimated empirically using identifying variation in the price of insurance such variation together with quantity data allows us to estimate the demand for insurance the same variation together with cost data allows us to estimate how insurers costs vary as market participants endogenously respond to price the slope of this estimated cost curve provides a direct test for both the existence and the nature of selection and the combination of demand and cost curves can be used to estimate welfare we illustrate our approach by applying it to data on employerprovided health insurance from one specific company we detect adverse selection but estimate that the quantitative welfare implications associated with inefficient pricing in our particular application are small in both absolute and relative terms

spatial lock in do falling house prices constrain residential mobility abstract falling house prices have caused numerous homeowners to suffer capital losses those with little home equity may be prevented from moving because of imperfections in housing finance markets the proceeds from the sale of their home may be insufficient to repay their mortgage and provide a down payment on a new home a data set of mortgages is used to examine the magnitude of these constraints estimates show that average mobility would have been 24 higher after 3 years had house prices not declined and after 4 years it would have been 33 higher among those with high initial loan to value ratios the differences are even greater

consumption and investment motives in housing wealth accumulation a french study abstract the dual motives of housing behavior consumption and investment make the analysis of housing purchases quite difficult nevertheless it is better to refer to a model that keeps the two dimensional aspect of housing henderson and ioannides am econ rev 73 93 111 1983 in the absence of institutional considerations this model predicts that it is the difference between the investment demand for housing and the consumption demand that explains decisions to purchase dwellings for owner occupation and for renting out we have tested the model on the french data of the survey actifs financiers 1992 results show that the difference between the two demands cannot in itself explain housing purchases transaction costs the tax system the public aid policies for home ownership and other market imperfections are inadequately dealt with moreover estimation and identification of housing demand functions both for consumption and investment tend to show that there are portfolio motives in the factors that determine housing demand for owner occupation french households behave in a different way than u s households for them the difference between the two demands for housing explains behavior and consumption motives dominate primary residence purchase ioannides and rosenthal rev econ statist xx 127 141 1994

prices parents and young people s household formation an economic theory of young people s decision to live apart from parents is presented and used to structure econometric analyses of the processes of leaving the parental home and returning to it which employ data from the british household panel survey for the first half of the 1990s the econometric estimates support the predictions of the theory in particular tighter housing markets as indicated by higher regional relative house prices significantly retard home leaving especially the formation of partnerships and encourage returns to the parental home young people with larger current income are more likely to leave but less likely to return to the parental home

residential mobility housing equity and the labour market henley a g 1998 residential mobility housing equity and the labour market economic journal 108 447 414 427

redlining in boston do mortgage lenders discriminate against neighborhoods historically lenders have been accused of redlining minority neighborhoods as well as refusing to lend to minority applicants considerable bank regulation is designed to prevent both actions however the strong correlation between race and neighborhood makes it difficult to distinguish the impact of geographic discrimination from the effects of racial discrimination previous studies have failed to untangle these two influences in part because of severe omitted variable bias the data set in this paper allows the distinct effects of race and geography to be identified and it shows that the evidence for redlining is weak

home ownership as a social norm and positional good subjective wellbeing evidence from panel data much attention has been devoted to examining the absolute benefits of home ownership e g security and autonomy this paper by contrast is concerned with conceptualising and testing the relative benefits of home ownership those benefits that depend on an individual s status in society home ownership has previously been analysed as a social norm implying that the relative benefits costs associated with being an owner renter are positively related to relevant others home ownership values the theoretical contribution of this paper is to additionally conceptualise home ownership as a positional good implying that the status of both home owners and renters is negatively related to relevant others home ownership consumption the empirical contribution of this paper is to quantitatively test for these relative benefits in terms of subjective wellbeing we run fixed effects regressions on three waves of the british household panel study we find that 1 a strengthening of relevant others home ownership values is associated with increases decreases in the subjective wellbeing of home owners renters and 2 an increase in relevant others home ownership consumption decreases the life satisfaction of owners but has no effect for renters overall our findings suggest that 1 the relative benefits of home ownership are both statistically significant and of a meaningful magnitude and 2 home ownership is likely to be both a social norm and a positional good without explicitly recognising these relative benefits policymakers risk overestimating the contribution of home ownership to societal wellbeing

how does home equity affect mobility abstract the impact of the housing crash on household mobility is theoretically ambiguous households that have little or negative equity are less likely to move because the proceeds from the sale of the home may not be large enough to pay off the original mortgage and provide a sufficient down payment on a new home on the other hand at sufficiently negative levels of home equity household mobility may actually increase through the foreclosure channel in this paper we develop and empirically test a model that incorporates both of these mechanisms our empirical results based on data for florida homeowners provide evidence of a non monotonic relationship between home equity and mobility although default induced mobility did increase following the financial crisis this increase did little to offset the substantial decline in voluntary moves due to home equity lock in we find that on net household mobility declined by roughly 25 in our sample because of reductions in equity

why are there nimbys an owner occupied home is an un usual asset because it cannot be diversi ed among locations and because it is the onlysizable asset that most owners possess among the unin sured risks of homeownership is devaluation by nearby changes in land use opponents of land use change are called nimbys not in my back yard this article submits that nimbyism is a rational response to the uninsured risks of home ownership it explores the possibilities and draw backs of providing an insurance market to cover such risks it concludes that some progress is being made towards developing such markets jel r52 residents who strenuously oppose devel opment of land in their immediate area are often called nimbys the acronymic per soni cation of the expression not in my backyard the oppositionof neighbors is an importantproblemin americanland use reg ulation itcanfrustrate the implementationof carefully planned residential development locally desired industrial development and placement of the necessary nuisances of ur ban life such as power plants and land lls downs 1994 fischel 1991 nelson 1999 portney 1991 rephann forthcoming nimbys sometimes appear to be irratio nal in theiroppositionto projects in the sense that they express far fetched anxieties or doggedly ght projects whose expected neighborhood effects seem small or even be nign i submit in this note that such anxieties might not be irrational if we consider that most nimbys are homeowners and that homeowners cannot insure their major and often only asset against devaluation by neighborhood effects nimbyism mightbet ter be viewed as a risk averse strategy i con clude with a few notes about how an insur ance market might be developed to head off

the socioeconomic impact of shared appreciation mortgages on borrowers empirical evidence from south australia shared appreciation mortgages sams realign traditional incentives in the lender borrower relationship by substituting future capital gains for interest income this makes them a potentially innovative solution to affordability and other homeownership crises taxation and regulatory barriers have impeded sam development limiting empirical studies of their impact on households this has not been the case in south australia where state government implementation of sams has made available a unique and detailed dataset of low income sam financed households examining this population it is found that sam borrowers benefit from increased budgetary expenditure on discretionary items following take up while simultaneously saving on some non discretionary items relative to a control sample furthermore sam homeownership also seems associated with increased borrower levels of neighbourhood satisfaction and community involvement overall these results indicate that sam financed homeownership leads to changes in borrower behaviour and deserves further consideration by the housing industry and research community

the social and private micro level consequences of homeownership abstract this paper reviews the literature that describes the micro level economic and social consequences of homeownership we adopt an interdisciplinary approach and include studies from economics sociology geography political science psychology and other disciplines our focus is on the set of consequences of homeownership in developed countries our list of potential outcomes of homeownership includes the impact on household wealth and portfolio choice mobility labor force participation urban structure and segregation home maintenance political and social activities health demographics self esteem and child outcomes there is substantial evidence that homeownership has important effects on some household behaviors and outcomes however we find that much of the past 30 year s literature on consequences of homeowning is deficient from a theoretical or econometric perspective we suggest solutions and identify research gaps present in the literature

what are the social benefits of homeownership experimental evidence for low income households abstract we estimate the social benefits of homeownership using an exogenous instrument based on randomly assigned treatment status from a field experiment that subsidized saving for home purchase for low income renters through individual development accounts idas this approach attempts to eliminate the potential correlation present in previous analyses between unobserved individual characteristics leading to homeownership and traits leading to provision of social capital or local amenities consistent with previous work we show that homeownership positively affects political engagement in simple probits instrumental variable probits however show no impact of homeownership on political involvement iv results for other social outcomes are less conclusive the analysis suggests that with the use of an exogenous instrument it is possible to generate results that are different from the previous literature our results also suggest that being eligible to open an ida did not spur households to provide more social capital or local amenities

consumption down payments and liquidity constraints one frequently cited explanation for the empirical failure of the orthodox life cycle permanent income hypothesis lc pih is the presence of binding liquidity constraints households inability to borrow and lend at the same interest rate or to borrow the desired quantity can distort household consumption profiles depressing consumption during periods when constraints bind whether or not liquidity constraints bind has important implications for the sensitivity of consumption to fluctuations in income the neutrality of government debt and the structure of taxation despite the potential importance of liquidity constraints in understanding macroeconomic behavior there has been comparatively little research into the effect of specific constraints on consumption one area of consumer behavior where liquidity constraints arguably may be important is in housing decisions and mortgage markets households wishing to own a first home must accumulate a down payment in order to qualify for a mortgage loan currently for conventional mortgages in the united states most lending institutions require between s percent and 20 percent of the purchase price of the home put down in advance of the purchase 2 without access to private gifts or loans many

aging and the income value of housing wealth abstract the potential of reverse annuity mortgages to increase the current income of the elderly is analyzed we conclude that most low income elderly also have little housing equity in general a reverse annuity mortgage would substantially affect the income only of the single elderly who are very old whose life expectancy is short on the other hand if the transfer were in the form of a lump sum payment rather than an annuity the payment would increase the liquid wealth of most elderly families by a large fraction thus legislation that would facilitate the market for reverse mortgages could improve substantially the financial status of a small proportion of the elderly

do urban neighborhoods benefit from homeowners evidence from housing prices homeownership is heavily subsidized in most countries the adverse effects of this policy on economic efficiency and income distribution are well documented in the economics literature the main argument in favor of subsidizing homeownership is that it creates positive externalities that offset these adverse effects in this paper we test whether homeowners create positive externalities that capitalize into housing prices in multi storey buildings using semi parametric hedonic regressions with and without instrumental variables we find no evidence of positive externalities although the results with instrumental variables are somewhat imprecise this result is robust to several sensitivity checks and to a relaxation of the identification assumptions of our instrument using set identification

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

the economic determinants of young people s household formation the paper derives predictions about the impact of the price of housing young adults income and parental income on the probability that a young adult in the united kingdom lives apart from his her parents it shows that the predicted effect of the price of housing is intimately related to the price elasticity of housing demand it uses longitudinal data on a cohort of britons born in 1958 surveyed in the national child development study to estimate dynamic models of first departure from the parental home and particularly to estimate the impact of housing price on the timing and destination of first departure excerpt

the transition to home ownership and the black white wealth gap this paper analyzes differences in the likelihood that black and white families become homeowners by following a sample of black and white renters over time we are able to separately study racial differences in the likelihood of applying for a mortgage and in the likelihood that a mortgage application is accepted although its effect on the race gap in housing transitions is small we find strong evidence that black applicants are almost twice as likely as comparable white households to be rejected even when credit history proxies and measures of household wealth are accounted for we show that the housing transition gap exists primarily because blacks are less likely to apply for mortgages in the first place the analysis suggests that differences in income family structure and in the ability and willingness of parents to provide down payment assistance are the primary reasons for this applications gap we speculate that the portion of the gap that remains unexplained after controlling for income d

lifetime income and housing affordability in singapore most commonly used measures of housing affordability are essentially short run indicators that compare current income with house prices or housing costs despite the emphasis in the literature on t

labour mobility and housing the impact of housing tenure and housing affordability on labour migration in the czech republic this article examines whether housing tenure and regional differences in housing affordability have an impact on labour mobility this relationship is important for understanding the sources of structural unemployment and impediments to economic growth using two sample surveys from the czech republic this research reveals that at the individual level housing tenure is the most powerful factor determining willingness to change residence for employment reasons a time series regression analysis reveals that the impact of housing affordability on observed interregional migration patterns is relatively weak and that this effect is concentrated among the highly educated seeking employment in the capital prague these results demonstrate that housing tenure has a significant impact on labour migration plans in case of unemployment and that the dynamic impact of regional differences in housing affordability on labour mobility is concentrated within the most highly skilled segment of the labour force

housing related well being in older people the impact of environmental and financial influences with the ageing of populations in europe one can expect new pressures on the existing housing stock to accommodate those older individuals with mobility problems at the same time housing assets are expected to be called upon to guarantee financial security for older homeowners the accessibility and suitability of housing and the financial security that housing provides may exert an independent influence on well being to what extent either factor prevails in influencing well being has important policy implications this paper empirically examines the impact of investment and environmental housing influences on satisfaction with housing in a population of older people data are used from the european country which had the greatest number of homeowners at the time of the survey spain and where at the same time older people rely heavily on informal caregiving robust evidence is presented to suggest that satisfaction with housing in old age is indeed independently associated with environmental influ

understanding the tax revolt eight explanations numerous explanations of the tax revolt have been offered since california s adoption of proposition 13 in 1978 unfortunately many of these explanations remain untested or have been tested inappropriately and the explanations are often jumbled together in a fashion that precludes theoretical clarity we extract eight explanations from the literature each of which assumes that the tax revolt is a systematic national phenomenon that is a function of individual level social economic and political factors having tested these explanations by means of a discriminant analysis of data from the 1978 american national election study we find little empirical corroboration for any of them this leads us to consider two alternative research programs one of which interprets the tax revolt within a symbolic politics framework

house price growth when children are teenagers a path to higher earnings abstract this paper examines whether rising house prices immediately prior to children entering college have an impact on their earnings as adults higher house prices provide homeowners with additional funding to invest in their children s human capital but also raise housing costs the results show that a 1 percentage point increase in house prices when children are 17 years old results in roughly 0 9 percent higher annual income for the children of homeowners and 1 5 percent lower annual income for the children of renters house price appreciation at age 17 also leads to higher college enrollment rates at age 19 and an increased likelihood of attendance at higher ranked post secondary institutions for children of homeowners as well as lower college enrollment rates for children of renters

a european cross country comparison of the impact of homeownership and transaction costs on job tenure de graaff t and van leuvensteijn m a european cross country comparison of the impact of homeownership and transaction costs on job tenure regional studies this paper looks at the impacts across european countries of homeownership and transaction costs on job tenure the analysis is based on a representative household sample of fourteen european countries covering the period 1994 2001 these data are merged with country specific transaction tax data and aggregate homeownership rates similar to previous microeconomic studies the results indicate that homeownership reduces job mobility as well as the probability of becoming unemployed or economically inactive it is found however that this effect is severely mitigated by two factors first it decreases when aggregate homeownership rates are higher thus homeowners have larger job tenures but more so in countries with low homeownership rates second transaction costs on the housing market are positively associated with the probability of becoming

exploring mortgage interest deduction reforms an equilibrium sorting model with endogenous tenure choice in most equilibrium sorting models esms of residential choice across neighborhoods the question of whether households rent or buy their home is either ignored or else tenure status is treated as exogenous of course tenure status is not exogenous and households tenure choices may have important public policy implications particularly since higher levels of homeownership have been shown to correlate strongly with various indicators of improved neighborhood quality indeed numerous policies including that of mortgage interest deduction mid have been implemented with the express purpose of promoting homeownership this paper presents an esm with simultaneous rental and purchase markets in which tenure choice is endogenized and neighborhood quality is partly determined by neighborhood composition the public policy relevance of the model is shown through a calibration exercise for boston massachusetts which explores the impacts of various reforms to the mid policy the simulations confirm some of the arguments made about reforming mid but also demonstrate how the complex patterns of behavioral change induced by policy reform can lead to unanticipated effects the results suggest that it may be possible to reform mid while maintaining the prevailing rates of homeownership and reducing the federal budget deficit

home ownership job duration and wages we investigate the impact of home ownership on individual job mobility and wages in denmark we find that home ownership has a negative impact on job to job mobility both in terms of transition into new local jobs and new jobs outside the local labor market in addition there is a clear negative effect of home ownership on the unemployment risk and a positive impact on wages these results are robust to different strategies for correcting for the possible endogeneity of the home owner variable

testing the central prediction of housing tenure transition models abstract housing tenure choice is usually assumed to depend on relative tenure specific user costs controlling for the household s lifetime income these models assume perfect capital markets however there is substantial evidence that potential first time homebuyers face significant borrowing constraints this paper proposes a tenure choice model based on tenure transition theory principles that recognizes the existence of both exogenous and endogenous liquidity constraints it predicts that tenure choice depends centrally on a household s liquefiable wealth controlling for the asset price of housing this prediction is tested using household survey data from both the united states and canada

homeownership social capital and satisfaction with local government prior studies suggest that homeownership positively impacts on social capital formation however many studies find it difficult to control adequately for selection effects in the form of factors some of which may be unobserved that encourage both homeownership and investment in social capital by households a biennial survey conducted in new zealand cities provides data that enable the control of such selection effects with propensity score matching methods while also benchmarking the results by means of regression methods the results confirm that homeownership exerts positive impacts on the formation of social capital at the same time homeownership demands greater accountability of local government and leads to reduced satisfaction with local government performance thereby negatively impacting on community social capital hence these two dimensions of housing related social capital work in opposite directions from each other a finding which has not been previously observed

nominal loss aversion housing equity constraints and household mobility evidence from the united states abstract this paper exploits the recent variation in us house prices to examine the effect of equity constraints and nominal loss aversion on household mobility detailed data from the 1985 1996 national longitudinal survey of youth nlsy79 were matched with house price data from 149 metropolitan areas to estimate instrumental variables linear probability and semi parametric proportional hazard models of intra metropolitan mobility household mobility is significantly influenced by nominal loss aversion there is little evidence that low equity because of fallen house prices constrains mobility

explaining the spatial variation in homeownership rates results for german regions lerbs o w and oberst c a explaining the spatial variation in homeownership rates results for german regions regional studies this paper employs cross sectional data on ninety six german regions to investigate the interregional variability of homeownership rates among the explanatory variables the analysis includes important regional housing market indicators as well as regional socio demographic composition urbanization and labour market performance an estimation strategy is chosen which accounts for different forms of spatial dependence between the regional units it is found that regional differences in the relative price of owning versus renting and the affordability of owner occupied housing play a key role in explaining why homeownership rates vary so substantially across the country the results indicate significant neighbourhood effects for several variables