New Evidence of the Effect of Transaction Costs on Residential Mobility
AbstractTransaction costs have attracted considerable attention in the theoretical literature on residential mobility. Transaction costs are thought to cause suboptimal consumption of housing but may also negatively affect labor market outcomes. In the current paper, we demonstrate empirically for the Netherlands that transaction costs have a strong negative effect on the owners' probability of moving. Under a range of different specifications, it appears that a 1 percent-point increase in the value of transaction costs-as a percentage of the value of the residence-decreases residential mobility rates by (at least) 8 percent. The estimates imply that ownership to ownership mobility rates would be substantially higher in the absence of the current 6 percent "ad valorem" buyer transaction tax. Our estimates are consistent with the observation that in the Netherlands "ad valorem" transaction costs mainly consist of buyer transaction costs. Copyright Blackwell Publishers, 2005
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Regional Science.
Volume (Year): 45 (2005)
Issue (Month): 4 ()
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-4146
Other versions of this item:
- Jos Van Ommeren & Michiel van Leuvensteijn, 2003. "New evidence of the effect of transaction costs on residential mobility," ERSA conference papers ersa03p7, European Regional Science Association.
- Michiel van Leuvensteijn & J. van Ommeren, 2003. "New evidence of the effect of transaction costs on residential mobility," CPB Discussion Paper 18, CPB Netherlands Bureau for Economic Policy Analysis.
- R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- D19 - Microeconomics - - Household Behavior - - - Other
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