The Homeownership Rate among the Elderly and the Life Cycle Hypothesis:European Evidence Using Individual and Household Data
AbstractOne of the central predictions of the Life Cycle Hypothesis is that individuals run down their wealth during retirement. Although housing wealth is the largest component of total household wealth in most countries, empirical evidence supporting the decumulation hypothesis is mixed. In this paper we examine the housing tenure decision by the aged with microdata at both a household and individual level. The results, based on data from the European Community Household Panel for thirteen European countries, show that for nearly all countries (except for Germany and Denmark), the homeownership rate among the elderly does not decline with age, rejecting the Life Cycle Hypothesis. The results are robust to the (household or individual) level at which the data is analysed. The estimates also show a significant cohort effect for most European countries, so that the later the year of birth, the higher the homeownership rate.
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Bibliographic InfoPaper provided by Universitat de les Illes Balears, Departament d'Economía Aplicada in its series DEA Working Papers with number 49.
Date of creation: 2012
Date of revision:
homeownership rate; the elderly; age-cohort effects; Life Cycle Hypothesis.;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
This paper has been announced in the following NEP Reports:
- NEP-AGE-2012-12-10 (Economics of Ageing)
- NEP-ALL-2012-12-10 (All new papers)
- NEP-DEM-2012-12-10 (Demographic Economics)
- NEP-EEC-2012-12-10 (European Economics)
- NEP-EUR-2012-12-10 (Microeconomic European Issues)
- NEP-URE-2012-12-10 (Urban & Real Estate Economics)
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