I construct dynamic economic models which focus on an elderly person's decision whether to move in response to changes in his or her health status. The models specify three health states (good, moderately disabled, and poor), three matching housing states (conventional, transitional, and institutional), and explicitly include several different kinds of mobility costs, including the direct utility costs, the indirect health effects of mobility, and, in the more complex model, financial transaction costs. The first model I present examines elderly mobility in a simple environment in which utility depends only on the match between housing and health, and a bequest. The second model extends the first to incorporate housing prices, household wealth, and elderly consumption decisions. Extensive simulations of the two models show that both predict considerable mobility, even when mobility costs are large. The results also highlight the importance of transitional housing, and provide evidence on the relationship between housing, mobility, household wealth, and consumption.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
4572.
Length: Date of creation: Dec 1993 Date of revision: Publication status: published relationship to a non-chapter. This should not happen. Please contact NBER. Handle: RePEc:nbr:nberwo:4572
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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.:
Steven F. Venti & David A. Wise, 1989.
"Aging, Moving, and Housing Wealth,"
NBER Chapters,
in: The Economics of Aging, pages 9-54
National Bureau of Economic Research, Inc.
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