The Relation between Financial and Housing Wealth of Dutch Households
AbstractWe analyze households' joint investment decisions for financial wealth and homes. We use a bivariate censored regression model with endogenous switching. Fixed costs or transaction costs are captured by an unobserved nonzero censoring threshold. The model allows for spill-over effects of a binding threshold for one asset on the demand for the other asset. We find that tenure choice affects the level of financial wealth. Our results do not support the view that people first accumulate financial wealth before acquiring homes.This can be due to the absence of down payments constraints in the Netherlands.
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Bibliographic InfoPaper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 1998:19.
Length: 28 pages
Date of creation: 15 Aug 1998
Date of revision:
Publication status: Published in Journal of Urban Economics, 2001, pages 374-403.
Contact details of provider:
Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
More information through EDIRC
Housing demand; Household saving; Portfolio choice; Limited dependent variables;
Other versions of this item:
- Hochguertel, S. & van Soest, A., 1998. "The Relation Between Financial and Housing Wealth of Dutch Households," Papers 1998:19, Uppsala - Working Paper Series.
- Hochgürtel, S. & Soest, A.H.O. van, 1996. "The Relation Between Financial and Housing Wealth of Dutch Households," Discussion Paper 1996-82, Tilburg University, Center for Economic Research.
- C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
This paper has been announced in the following NEP Reports:
- NEP-ALL-1998-10-08 (All new papers)
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