Do Long Distance Moves Discourage Homeownership? Evidence from England
AbstractWe hypothesize that as the distance of a residential move increases, the cost of collecting information on the destination housing market rises, the amount and quality of information collected fall, and the chances of making an ill-informed housing purchase decision increases, reducing the likelihood of such a purchase. Since owning relative to renting is associated with a much larger financial commitment and much higher transaction costs, the propensity to own can be expected to decrease with the distance moved. Using data from the Survey of English Housing from 1993 to 2008, we document that, consistent with our prior, an increase in the distance moved by one standard deviation decreases the probability that a household owns the next home by 3.2 percentage points.
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Bibliographic InfoPaper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0141.
Date of creation: Sep 2013
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Residential mobility; distance of residential relocation; information cost; investment risk; homeownership; tenure choice;
Find related papers by JEL classification:
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-02 (All new papers)
- NEP-EUR-2013-10-02 (Microeconomic European Issues)
- NEP-MIG-2013-10-02 (Economics of Human Migration)
- NEP-URE-2013-10-02 (Urban & Real Estate Economics)
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