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A Permanent Change in the Route to Owner Occupation?

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  • Mark Andrew

Abstract

This paper attempts to explain why home ownership rates among young adults fell in the early 1990s when various indicators suggested it had become more affordable. As a potential explanation, we focus on the relatively slower growth in their incomes and argue that this could signal a fundamental change in behaviour, a change in route adopted into owner occupation, induced by structural economic change. In examining the implications for housing tenure, we use a conditional fixed effects multinomial logit model to exploit the information on the tenure choice and the timing of transitions in the British Household Panel Survey. Our results reveal that relatively slower income growth contributed significantly to this decline and that ignoring the intertemporal correlation in micro-panels generates inconsistent results. Copyright (c) Scottish Economic Society 2004.

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  • Mark Andrew, 2004. "A Permanent Change in the Route to Owner Occupation?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(1), pages 24-48, February.
  • Handle: RePEc:bla:scotjp:v:51:y:2004:i:1:p:24-48
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    References listed on IDEAS

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    1. Milgrom, Paul, 1989. "Auctions and Bidding: A Primer," Journal of Economic Perspectives, American Economic Association, pages 3-22.
    2. AndréS GóMez-Lobo & Stefan Szymanski, 2001. "A Law of Large Numbers: Bidding and Compulsory Competitive Tendering for Refuse Collection Contracts," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 18(1), pages 105-113, February.
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    6. Klemperer, Paul, 1999. " Auction Theory: A Guide to the Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 13(3), pages 227-286, July.
    7. Henry Ohlsson, 2003. "Ownership and Production Costs: Choosing between Public Production and Contracting-Out in the Case of Swedish Refuse Collection," Fiscal Studies, Institute for Fiscal Studies, pages 451-476.
    8. Domberger, Simon & Hall, Christine & Li, Eric Ah Lik, 1995. "The Determinants of Price and Quality in Competitively Tendered Contracts," Economic Journal, Royal Economic Society, vol. 105(433), pages 1454-1470, November.
    9. Ohlsson, Henry, 1998. "Ownership and Production Costs - Choosing Between Public Production and Contracting Out," Working Paper Series 1998:6, Uppsala University, Department of Economics.
    10. Hendricks, Kenneth & Porter, Robert H & Boudreau, Bryan, 1987. "Information, Returns, and Bidding Behavior in OCS Auctions: 1954-1969," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 517-542, June.
    11. Laffont, Jean-Jacques, 1997. "Game theory and empirical economics: The case of auction data 1," European Economic Review, Elsevier, vol. 41(1), pages 1-35, January.
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    Cited by:

    1. Miki Seko & Kazuto Sumita & Michio Naoi, 2012. "Residential Mobility Decisions in Japan: Effects of Housing Equity Constraints and Income Shocks under the Recourse Loan System," The Journal of Real Estate Finance and Economics, Springer, vol. 45(1), pages 63-87, June.
    2. Monika Bazyl, 2009. "Factors Influencing Tenure Choice in European Countries," Central European Journal of Economic Modelling and Econometrics, CEJEME, pages 371-387.
    3. Andrew, Mark & Haurin, Donald & Munasib, Abdul, 2006. "Explaining the route to owner-occupation: A transatlantic comparison," Journal of Housing Economics, Elsevier, vol. 15(3), pages 189-216, September.
    4. 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.

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