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House Prices and Home Ownership: a Cohort Analysis

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  • R. Bottazzi
  • T. Crossley
  • M. Wakefield

Abstract

England has very volatile house prices. We use pseudo-panel data spanning multiple house-price cycles over nearly forty years, to assess the extent to which house prices affect access to homeownership by age thirty, and whether differences in ownership rates persist. We find that ownership rates at age thirty have varied substantially, with this variation significantly related to prices. Measurement error problems attenuation bias and other biases - complicate an analysis of the persistence of these differences in ownership. We use two methods - including one that develops the ideas of Deaton (1985) - to deal with this and find robust evidence that cohorts with low ownership rates at thirty close about 80% of the ownership gap by age forty.

Suggested Citation

  • R. Bottazzi & T. Crossley & M. Wakefield, 2011. "House Prices and Home Ownership: a Cohort Analysis," Working Papers wp790, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:wp790
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    1. Maria Chiuri & Tullio Jappelli, 2010. "Do the elderly reduce housing equity? An international comparison," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(2), pages 643-663, March.
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    4. Emilio Fernandez-Corugedo & John Muellbauer, 2006. "Consumer credit conditions in the United Kingdom," Bank of England working papers 314, Bank of England.
    5. Tullio Jappelli, 1999. "The Age‐Wealth Profile And The Life‐Cycle Hypothesis: A Cohort Analysis With A Time Series Of Cross‐Sections Of Italian Households," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(1), pages 57-75, March.
    6. Chiuri, Maria Concetta & Jappelli, Tullio, 2003. "Financial market imperfections and home ownership: A comparative study," European Economic Review, Elsevier, vol. 47(5), pages 857-875, October.
    7. Renata Bottazzi, 2004. "Labour market participation and mortgage related borrowing constraints," IFS Working Papers W04/09, Institute for Fiscal Studies.
    8. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
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    Cited by:

    1. Tilley, Sara & Houston, Donald, 2016. "The gender turnaround: Young women now travelling more than young men," Journal of Transport Geography, Elsevier, vol. 54(C), pages 349-358.
    2. Orazio Attanasio & Renata Bottazzi & Hamish Low & Lars Nesheim & Matthew Wakefield, 2012. "Modelling the Demand for Housing over the Lifecycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(1), pages 1-18, January.

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    More about this item

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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