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A Permanent Change in the Route to Owner Occupation?

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  • Mark Andrew

Abstract

This paper attempts to explain why home ownership rates among young adults fell in the early 1990s when various indicators suggested it had become more affordable. As a potential explanation, we focus on the relatively slower growth in their incomes and argue that this could signal a fundamental change in behaviour, a change in route adopted into owner occupation, induced by structural economic change. In examining the implications for housing tenure, we use a conditional fixed effects multinomial logit model to exploit the information on the tenure choice and the timing of transitions in the British Household Panel Survey. Our results reveal that relatively slower income growth contributed significantly to this decline and that ignoring the intertemporal correlation in micro‐panels generates inconsistent results.

Suggested Citation

  • Mark Andrew, 2004. "A Permanent Change in the Route to Owner Occupation?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(1), pages 24-48, February.
  • Handle: RePEc:bla:scotjp:v:51:y:2004:i:1:p:24-48
    DOI: 10.1111/j.0036-9292.2004.05101002.x
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    Cited by:

    1. Andrew, Mark & Haurin, Donald & Munasib, Abdul, 2006. "Explaining the route to owner-occupation: A transatlantic comparison," Journal of Housing Economics, Elsevier, vol. 15(3), pages 189-216, September.
    2. Miki Seko & Kazuto Sumita & Michio Naoi, 2012. "Residential Mobility Decisions in Japan: Effects of Housing Equity Constraints and Income Shocks under the Recourse Loan System," The Journal of Real Estate Finance and Economics, Springer, vol. 45(1), pages 63-87, June.
    3. Monika Bazyl, 2009. "Factors Influencing Tenure Choice in European Countries," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 1(4), pages 371-387, December.
    4. D. Isebaert, 2013. "Housing Tenure and Geographical Mobility in Belgium," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 13/855, Ghent University, Faculty of Economics and Business Administration.

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