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New Evidence of the Effect of Transaction Costs on Residential Mobility

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  • Jos van Ommeren

    ()
    (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)

  • Michiel van Leuvensteijn

    ()
    (CPB Netherlands Bureau for Economic Policy Analysis, The Hague)

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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Citations

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Cited by:
  1. Eerola, Essi & Määttänen, Niku, 2013. "Matching in the housing market with risk aversion and savings," ETLA Working Papers 3, The Research Institute of the Finnish Economy.
  2. Stefan P.T. Groot & Henri L.F. de Groot & Paolo Veneri, 2012. "The Educational Bias in Commuting Patterns: Micro-Evidence for the Netherlands," Tinbergen Institute Discussion Papers 12-080/3, Tinbergen Institute.
  3. Eva Gutierrez Puigarnau & Jos N. van Ommeren (VU), 2013. "Do rich households live farther away from their workplaces?," CPB Discussion Paper 244, CPB Netherlands Bureau for Economic Policy Analysis.
  4. Zenou, Yves, 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).
  5. Larsen, Morten Marott & Pilegaard, Ninette & Ommeren, Jos Van, 2008. "Congestion and residential moving behaviour," Regional Science and Urban Economics, Elsevier, vol. 38(4), pages 378-387, July.
  6. Ben Dachis & Gilles Duranton & Matthew A. Turner, 2011. "The effects of land transfer taxes on real estate markets: Evidence from a natural experiment in Toronto," Working Papers tecipa-423, University of Toronto, Department of Economics.
  7. Díaz Serrano, Luis & Stoyanova, Alexandrina Petrova, 2009. "Mobility and Housing Satisfaction: An Empirical Analysis for Twelve EU Countries," Working Papers 2072/42895, Universitat Rovira i Virgili, Department of Economics.
  8. Stefan P.T. Groot & Henri L.F. de Groot & Paolo Veneri, 2012. "The Educational Bias in Commuting Patterns: Micro-Evidence for the Netherlands," Tinbergen Institute Discussion Papers 12-080/3, Tinbergen Institute.
  9. Jie Chen, 2013. "Housing tenure, residential mobility and adolescents’ education achievement: evidence from Sweden," The Annals of Regional Science, Springer, vol. 50(1), pages 275-294, February.
  10. Davidoff, Ian & Leigh, Andrew, 2013. "How Do Stamp Duties Affect the Housing Market?," IZA Discussion Papers 7463, Institute for the Study of Labor (IZA).
  11. Zenou, Yves, 2009. "Urban search models under high-relocation costs. Theory and application to spatial mismatch," Labour Economics, Elsevier, vol. 16(5), pages 534-546, October.
  12. Teemu Lyytikäinen & Hilber & A. L. Christian, 2013. "Housing transfer taxes and household mobility: Distortion on the housing or labour market?," Working Papers 47, Government Institute for Economic Research Finland (VATT).
  13. John Muellbauer & Anthony Murphy & John Muellbauer, 2006. "Housing Market Dynamics and Regional Migration in Britain," Economics Series Working Papers 275, University of Oxford, Department of Economics.
  14. Benjamin Dachis & Gilles Duranton & Matthew A. Turner, 2008. "Sand in the Gears: Evaluating the Effects of Toronto's Land Transfer Tax," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 277, December.
  15. Jacobo Uña-Álvarez & Raquel Arévalo-Tomé & M. Soledad Otero-Giráldez, 2009. "Nonparametric Estimation of Households’ Duration of Residence from Panel Data," The Journal of Real Estate Finance and Economics, Springer, vol. 39(1), pages 58-73, July.
  16. repec:ese:iserwp:2010-05 is not listed on IDEAS
  17. Wolswijk, Guido, 2005. "On some fiscal effects on mortgage debt growth in the EU," Working Paper Series 0526, European Central Bank.
  18. Casper Ewijk & Bas Jacobs & Ruud Mooij, 2007. "Welfare Effects of Fiscal Subsidies on Home Ownership in the Netherlands," De Economist, Springer, vol. 155(3), pages 323-336, September.
  19. 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.
  20. Aida Caldera Sánchez & Dan Andrews, 2011. "To Move or not to Move: What Drives Residential Mobility Rates in the OECD?," OECD Economics Department Working Papers 846, OECD Publishing.

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