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Housing tenure choice and the dual income household

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  • Carter, Steven

Abstract

Housing tenure choice has been the subject of a very large literature. Many treatments have sought to estimate the effect of household income on the likelihood of home ownership. To date, no study has ever disaggregated the household income of married couples into the separate labor income components to see if one partner's income has a different effect than the other. Using a derived likelihood function to control for censoring in the wife's income, this paper estimates the effect of separate incomes on housing tenure choice, accounting for possible endogeneity of the wife's income. To compare the results of this estimation method, the paper also estimates the standard IV models, 2SLS and IV probit. While the results show that there is no endogeneity of the wife's income, ignoring the censoring of the endogenous variable (when a large fraction of observations are censored) can possibly lead to biased coefficient estimates. Also, this paper confirms the importance of total household income, which has a larger effect than the total disaggregated components.

Suggested Citation

  • Carter, Steven, 2011. "Housing tenure choice and the dual income household," Journal of Housing Economics, Elsevier, vol. 20(3), pages 159-170, September.
    • Handle: RePEc:eee:jhouse:v:20:y:2011:i:3:p:159-170
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    Cited by:

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    2. Dilmaghani, Maryam & Dean, Jason, 2020. "Sexual orientation and homeownership in Canada," Journal of Housing Economics, Elsevier, vol. 49(C).
    3. Allen Head & Huw Lloyd‐Ellis & Derek Stacey, 2023. "Heterogeneity, Frictional Assignment, And Home‐Ownership," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(3), pages 1265-1308, August.
    4. Hoehn, John P. & Adanu, Kwami, 2014. "What motivates voters’ support for eminent domain reform: Ownership, vulnerability, or ideology?," International Review of Law and Economics, Elsevier, vol. 37(C), pages 90-99.
    5. Hoa Nguyen, 2019. "Impact of Increasing Minimum Wage on Homeownership and Home Equity Loans," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 25(2), pages 209-219, May.
    6. Philipp M Lersch & Wilfred Uunk, 2017. "The shadow of future homeownership: the association of wanting to move into homeownership with labour supply," Work, Employment & Society, British Sociological Association, vol. 31(3), pages 522-541, June.
    7. Christophe Schalck, 2016. "Rental housing for a French taxpayer: are there tax arbitrage opportunities in the USA?," Applied Economics Letters, Taylor & Francis Journals, vol. 23(13), pages 921-925, September.
    8. Bhat, Chandra R., 2015. "A comprehensive dwelling unit choice model accommodating psychological constructs within a search strategy for consideration set formation," Transportation Research Part B: Methodological, Elsevier, vol. 79(C), pages 161-188.
    9. Eugeniya Malinskaya & Konstantin A. Kholodilin, 2022. "Stimulating Housing Policy and Housing Tenure Choice: Evidence from the G7 Countries," Discussion Papers of DIW Berlin 1997, DIW Berlin, German Institute for Economic Research.
    10. Boehm, Thomas P. & Schlottmann, Alan M., 2014. "The dynamics of housing tenure choice: Lessons from Germany and the United States," Journal of Housing Economics, Elsevier, vol. 25(C), pages 1-19.

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