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New Evidence of the Effect of Transaction Costs on Residential Mobility

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Author Info
Jos van Ommeren () (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)
Michiel van Leuvensteijn () (CPB Netherlands Bureau for Economic Policy Analysis, The Hague)

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Abstract

Transaction costs have attracted considerably attention in the theoretical literature on residential mobility. In many European countries, these costs mainly consist of ad-valorem transaction costs. In the current paper, we demonstrate empirically for the Netherlands that the transaction costs have a strong negative effect on the owners' probability of moving. Under a range of different specifications, it appears that a one percent-point increase in the value of transaction costs - as a percentage of the value of the residence - decreases ownership to ownership residential mobility rates by eight percent. The estimates imply that ownership to ownership mobility rates would be 50 percent higher in the absence of the current six percent ad-valorem buyer transaction tax. Our estimates are consistent with the observation that ad-valorem transaction costs mainly consist of buyer transaction costs.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 02-117/3.

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Date of creation: 18 Nov 2002
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Handle: RePEc:dgr:uvatin:20020117

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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)
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  26. Arno J. van der Vlist & Cees Gorter & Peter Nijkamp & Piet Rietveld, 2002. "Residential Mobility and Local Housing Market Differences," Tinbergen Institute Discussion Papers 02-003/3, Tinbergen Institute. [Downloadable!]
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Cited by:
(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. 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!]
    Other versions:
  2. 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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