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New Evidence of the Effect of Transaction Costs on Residential Mobility

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Author Info
Jos Van Ommeren
Michiel Van Leuvensteijn

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Abstract

Transaction 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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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.0022-4146.2005.00389.x
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Article provided by Blackwell Publishing in its journal Journal of Regional Science.

Volume (Year): 45 (2005)
Issue (Month): 4 ()
Pages: 681-702
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Handle: RePEc:bla:jregsc:v:45:y:2005:i:4:p:681-702

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Venti, Steven F. & Wise, David A., 1984. "Moving and housing expenditure: Transaction costs and disequilibrium," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 207-243. [Downloadable!] (restricted)
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  2. Lundborg, Per & Skedinger, Per, 1998. "Capital gains taxation and residential mobility in Sweden," Journal of Public Economics, Elsevier, vol. 67(3), pages 399-419, March. [Downloadable!] (restricted)
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  3. Dynarski, Mark, 1985. "Housing demand and disequilibrium," Journal of Urban Economics, Elsevier, vol. 17(1), pages 42-57, January. [Downloadable!] (restricted)
  4. Edin, Per-Anders & Englund, Peter, 1991. "Moving costs and housing demand : Are recent movers really in equilibrium?," Journal of Public Economics, Elsevier, vol. 44(3), pages 299-320, April. [Downloadable!] (restricted)
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  5. Jan Rouwendal & Erik Meijer, 2001. "Preferences for Housing, Jobs, and Commuting: A Mixed Logit Analysis," Journal of Regional Science, Blackwell Publishing, vol. 41(3), pages 475-505. [Downloadable!] (restricted)
  6. Mizon, Grayham E & Richard, Jean-Francois, 1986. "The Encompassing Principle and Its Application to Testing Non-nested Hypotheses," Econometrica, Econometric Society, vol. 54(3), pages 657-78, May. [Downloadable!] (restricted)
  7. Arno J van der Vlist & Cees Gorter & Peter Nijkamp & Piet Rietveld, 2002. "Residential mobility and local housing-market differences," Environment and Planning A, Pion Ltd, London, vol. 34(7), pages 1147-1164, July. [Downloadable!] (restricted)
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  8. Pinto, Santiago M., 2002. "Residential Choice, Mobility, and the Labor Market," Journal of Urban Economics, Elsevier, vol. 51(3), pages 469-496, May. [Downloadable!] (restricted)
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  11. Hardman, Anna M. & Ioannides, Yannis M., 1995. "Moving behavior and the housing market," Regional Science and Urban Economics, Elsevier, vol. 25(1), pages 21-39, February. [Downloadable!] (restricted)
  12. Haurin, Donald R. & Gill, H. Leroy, 2002. "The Impact of Transaction Costs and the Expected Length of Stay on Homeownership," Journal of Urban Economics, Elsevier, vol. 51(3), pages 563-584, May. [Downloadable!] (restricted)
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  14. Chan, Sewin, 1996. "Residential mobility and mortgages," Regional Science and Urban Economics, Elsevier, vol. 26(3-4), pages 287-311, June. [Downloadable!] (restricted)
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  16. Ioannides, Yannis M & Rosenthal, Stuart S, 1994. "Estimating the Consumption and Investment Demands for Housing and Their Effect on Housing Tenure Status," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 127-41, February. [Downloadable!] (restricted)
  17. Piet Rietveld & Peter Nijkamp & Jos van Ommeren, 2000. "Job mobility, residential mobility and commuting: A theoretical analysis using search theory," The Annals of Regional Science, Springer, vol. 34(2), pages 213-232. [Downloadable!] (restricted)
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  19. Quigley, John M, 1987. "Interest Rate Variations, Mortgage Prepayments and Household Mobility," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 636-43, November. [Downloadable!] (restricted)
  20. Lundborg, Per & Skedinger, Per, 1999. "Transaction Taxes in a Search Model of the Housing Market," Journal of Urban Economics, Elsevier, vol. 45(2), pages 385-399, March. [Downloadable!] (restricted)
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  22. Henderson, J. Vernon & Ioannides, Yannis M., 1989. "Dynamic aspects of consumer decisions in housing markets," Journal of Urban Economics, Elsevier, vol. 26(2), pages 212-230, September. [Downloadable!] (restricted)
  23. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, vol. 47(4), pages 939-56, July. [Downloadable!] (restricted)
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  26. Amundsen, Eirik S., 1985. "Moving costs and the microeconomics of intra-urban mobility," Regional Science and Urban Economics, Elsevier, vol. 15(4), pages 573-583, November. [Downloadable!] (restricted)
  27. Gronberg, Timothy J. & Reed, W. Robert, 1992. "Estimation of duration models using the Annual Housing Survey," Journal of Urban Economics, Elsevier, vol. 31(3), pages 311-324, May. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Casper Ewijk & Bas Jacobs & Ruud Mooij, 2007. "Welfare Effects of Fiscal Subsidies on Home Ownership in the Netherlands," De Economist, Springer, vol. 155(3), pages 323-336, September. [Downloadable!] (restricted)
  2. Benjamin Dachis & Gilles Duranton & Matthew A. Turner, 2008. "Sand in the Gears: Evaluating the Effects of Toronto's Land Transfer Tax," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 277, December. [Downloadable!]
  3. Jacobo Uña-Álvarez & Raquel Arévalo-Tomé & M. Soledad Otero-Giráldez, 2009. "Nonparametric Estimation of Households’ Duration of Residence from Panel Data," The Journal of Real Estate Finance and Economics, Springer, vol. 39(1), pages 58-73, July. [Downloadable!] (restricted)
  4. Anthony Murphy & John Muellbauer & Gavin Cameron, 2006. "Housing Market Dynamics and Regional Migration in Britain," Economics Series Working Papers 275, University of Oxford, Department of Economics. [Downloadable!]
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  5. Yves Zenou, 2007. "High Relocation Costs in Search-Matching Models: Theory and Application to Spatial Mismatch," IZA Discussion Papers 2739, Institute for the Study of Labor (IZA). [Downloadable!]
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