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Housing Market Interventions and Mobility: An International Comparison

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  • W. Paul Strassmann

    (Michigan State University, East Lansing, MI 48824, USA)

Abstract

Government interventions in housing markets usually have a strong side effect of lowering residential mobility. Interventions tend to raise the price of owner-occupied dwellings and to lower rents compared with household incomes. An index of these two tendencies is calculated for major conurbations of 16 countries. Among these, Switzerland, South Korea, Sri Lanka and the former German Democratic Republic are of particular interest. The rank order correlation of the index with residential mobility appears to be strong, 0.962, and with an elasticity of -0.815 three-quarters of the variance is explained. No correlation was found with the home-ownership rate. In so far as lower mobility impairs housing welfare, market interventions should be avoided, but it is recognised that such interventions primarily reflect concern for equity and externalities.

Suggested Citation

  • W. Paul Strassmann, 1991. "Housing Market Interventions and Mobility: An International Comparison," Urban Studies, Urban Studies Journal Limited, vol. 28(5), pages 759-771, October.
    • Handle: RePEc:sae:urbstu:v:28:y:1991:i:5:p:759-771
    DOI: 10.1080/00420989120080911
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    References listed on IDEAS

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    2. Seko, Miki & Sumita, Kazuto, 2007. "Effects of government policies on residential mobility in Japan: Income tax deduction system and the Rental Act," Journal of Housing Economics, Elsevier, vol. 16(2), pages 167-188, June.
    3. Bertaud, Alain & Malpezzi, Stephen, 2001. "Measuring the Costs and Benefits of Urban Land Use Regulation: A Simple Model with an Application to Malaysia," Journal of Housing Economics, Elsevier, vol. 10(3), pages 393-418, September.
    4. Strassmann, Paul & Blunt, Alistair, 1993. "Land, Income, Mobility and Housing: The Case of Metro Manila," Philippine Journal of Development JPD 1993 Vol. XX No. 1-d, Philippine Institute for Development Studies.
    5. 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.
    6. Jie Chen, 2013. "Housing tenure, residential mobility and adolescents’ education achievement: evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(1), pages 275-294, February.
    7. Zhou, Zhengyi, 2018. "Housing market sentiment and intervention effectiveness: Evidence from China," Emerging Markets Review, Elsevier, vol. 35(C), pages 91-110.

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