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The Relation between Financial and Housing Wealth of Dutch Households

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Author Info
Hochguertel, Stefan (Convento di San Domenico)
van Soest, Arthur (Department of Econometrics and CentER)

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Abstract

We 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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Publisher Info
Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 1998:19.

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Length: 28 pages
Date of creation: 15 Aug 1998
Date of revision:
Publication status: Published in Journal of Urban Economics, 2001, pages 374-403.
Handle: RePEc:hhs:uunewp:1998_019

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Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
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Web page: http://www.nek.uu.se/
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Related research
Keywords: Housing demand; Household saving; Portfolio choice; Limited dependent variables;

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Find related papers by JEL classification:
C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
R21 - Urban, Rural, and Regional Economics - - Household Analysis - - - Housing Demand

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References listed on IDEAS
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. Koning, R.H. & Ridder, G., 1993. "Rent Assistance and Housing Demand," Papers 544, Groningen State, Institute of Economic Research-.
    Other versions:
  2. Alessie, Rob & Lusardi, Annamaria & Kapteyn, Arie, 1995. "Saving and wealth holdings of the elderly," Ricerche Economiche, Elsevier, vol. 49(3), pages 293-314, September. [Downloadable!] (restricted)
    Other versions:
  3. N. Gregory Mankiw & David N. Weil, 1990. "The Baby Boom, The Baby Bust, and the Housing Market," NBER Working Papers 2794, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-33, March. [Downloadable!] (restricted)
  5. James Banks & Richard Blundell, 1993. "Household saving behaviour in the UK," IFS Working Papers W93/05, Institute for Fiscal Studies.
  6. Henderson, J Vernon & Ioannides, Yannis M, 1983. "A Model of Housing Tenure Choice," American Economic Review, American Economic Association, vol. 73(1), pages 98-113, March. [Downloadable!] (restricted)
  7. Kessler, Denis & Wolff, Edward N, 1991. "A Comparative Analysis of Household Wealth Patterns in France and the United States," Review of Income and Wealth, Blackwell Publishing, vol. 37(3), pages 249-66, September.
  8. Donald R. Haurin & Patric H. Hendershott & Susan M. Wachter, 1996. "Expected Home Ownership and Real Wealth Accumulation of Youth," NBER Working Papers 5629, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Louise Sheiner & David N. Weil, 1992. "The Housing Wealth of the Aged," NBER Working Papers 4115, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Bresnahan, Timothy F. & Reiss, Peter C., 1991. "Empirical models of discrete games," Journal of Econometrics, Elsevier, vol. 48(1-2), pages 57-81. [Downloadable!] (restricted)
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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. Hochguertel, S., 1997. "Precautionary motives and portfolio decisions," Discussion Paper 55, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
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