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Homeownerhip and Entrepreneurship

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  • Philippe Bracke
  • Christian Hilber
  • Olmo Silva

Abstract

We study the link between homeownership and entrepreneurship by exploiting the longitudinal dimension of the British Household Panel Survey (BHPS) and constructing a detailed monthly-spell dataset that tracks individuals‟ job history and tenure choice, coupled with other time-varying characteristics. Our fixed-effects estimates show that purchasing a house reduces the likelihood of starting a business by 20-25%. This result is driven by homeowners with mortgages and persists for several years after entering homeownership. The negative link can be rationalized by portfolio considerations: leveraged housing investments crowd out entrepreneurial investments. Alternative explanations based on credit constraints find little support in our data.

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Bibliographic Info

Paper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0103.

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Date of creation: Apr 2012
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Handle: RePEc:cep:sercdp:0103

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Web page: http://www.spatialeconomics.ac.uk/SERC/publications/default.asp

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Keywords: Entrepreneurship; homeownership; panel estimation;

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Cited by:
  1. Weber, Jeremy G. & Key, Nigel, 2013. "Does proprietor wealth influence small business decisions? Land appreciation and farm business borrowing, land ownership, and output," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150408, Agricultural and Applied Economics Association.
  2. Giulia Faggio & Olmo Silva, 2012. "Does Self-Employment Measure Entrepreneurship? Evidence from Great Britain," SERC Discussion Papers 0109, Spatial Economics Research Centre, LSE.

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