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New evidence of the effect of transaction costs on residential mobility

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  • Michiel van Leuvensteijn

    ()

  • J. van Ommeren

Abstract

Transaction costs have attracted considerable attention in the theoretical literature on residential mobility. In many European countries, these costs mainly consist of ad-valorem transaction costs. In the current paper, we demonstrate empirically for the Netherlands that the transaction costs have a strong negative effect on the owners' probability of moving. Under a range of different specifications, it appears that a one percent-point increase in the value of transaction costs - as a percentage of the value of the residence - decreases ownership to ownership residential mobility rates by eight percent. Our estimates are consistent with the observation that in the Netherlands ad-valorem transaction costs mainly consist of buyer transaction costs.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 18.

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Date of creation: Jun 2003
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Handle: RePEc:cpb:discus:18
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Find related papers by JEL classification:
  • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
  • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
  • D19 - Microeconomics - - Household Behavior - - - Other

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