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New evidence of the effect of transaction costs on residential mobility

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  • Michiel van Leuvensteijn

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • 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.

Suggested Citation

  • Michiel van Leuvensteijn & J. van Ommeren, 2003. "New evidence of the effect of transaction costs on residential mobility," CPB Discussion Paper 18, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:discus:18
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    References listed on IDEAS

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    Cited by:

    1. Ian Davidoff & Andrew Leigh, 2013. "How Do Stamp Duties Affect the Housing Market?," The Economic Record, The Economic Society of Australia, vol. 89(286), pages 396-410, September.
    2. Casper Ewijk & Bas Jacobs & Ruud Mooij, 2007. "Welfare Effects of Fiscal Subsidies on Home Ownership in the Netherlands," De Economist, Springer, vol. 155(3), pages 323-336, September.
    3. Hilber, Christian A.L. & Lyytikäinen, Teemu, 2017. "Transfer taxes and household mobility: Distortion on the housing or labor market?," Journal of Urban Economics, Elsevier, vol. 101(C), pages 57-73.
    4. Wolswijk, Guido, 2005. "On some fiscal effects on mortgage debt growth in the EU," Working Paper Series 526, European Central Bank.
    5. Besley, Timothy & Meads, Neil & Surico, Paolo, 2014. "The incidence of transaction taxes: Evidence from a stamp duty holiday," Journal of Public Economics, Elsevier, vol. 119(C), pages 61-70.
    6. Eva Gutierrez Puigarnau & Jos N. van Ommeren, 2013. "Do rich households live farther away from their workplaces?," CPB Discussion Paper 244, CPB Netherlands Bureau for Economic Policy Analysis.
    7. 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.
    8. Jos Van Ommeren & Michiel Van Leuvensteijn, 2005. "New Evidence of the Effect of Transaction Costs on Residential Mobility," Journal of Regional Science, Wiley Blackwell, vol. 45(4), pages 681-702.
    9. Christian A. L. Hilber & Teemu Lyytikäinen, 2012. "The Effect of the UK Stamp Duty Land Tax on Household Mobility," SERC Discussion Papers 0115, Spatial Economics Research Centre, LSE.
    10. John Muellbauer & Anthony Murphy & John Muellbauer, 2006. "Housing Market Dynamics and Regional Migration in Britain," Economics Series Working Papers 275, University of Oxford, Department of Economics.
    11. Zenou, Yves, 2009. "Urban search models under high-relocation costs. Theory and application to spatial mismatch," Labour Economics, Elsevier, vol. 16(5), pages 534-546, October.
    12. Ben Dachis & Gilles Duranton & Matthew A. Turner, 2012. "The effects of land transfer taxes on real estate markets: evidence from a natural experiment in Toronto," Journal of Economic Geography, Oxford University Press, vol. 12(2), pages 327-354, March.
    13. Larsen, Morten Marott & Pilegaard, Ninette & Ommeren, Jos Van, 2008. "Congestion and residential moving behaviour," Regional Science and Urban Economics, Elsevier, vol. 38(4), pages 378-387, July.
    14. Díaz Serrano, Luis & Stoyanova, Alexandrina Petrova, 2009. "Mobility and Housing Satisfaction: An Empirical Analysis for Twelve EU Countries," Working Papers 2072/42895, Universitat Rovira i Virgili, Department of Economics.
    15. Birgitta Rabe & Mark P. Taylor, 2012. "Differences in Opportunities? Wage, Employment and House-Price Effects on Migration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 74(6), pages 831-855, December.
    16. Benjamin Dachis & Gilles Duranton & Matthew A. Turner, 2008. "Sand in the Gears: Evaluating the Effects of Toronto's Land Transfer Tax," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 277, December.
    17. Eerola, Essi & Määttänen, Niku, 2013. "Matching in the housing market with risk aversion and savings," ETLA Working Papers 3, The Research Institute of the Finnish Economy.
    18. Stefan P.T. Groot & Henri L.F. de Groot & Paolo Veneri, 2012. "The Educational Bias in Commuting Patterns: Micro-Evidence for the Netherlands," Tinbergen Institute Discussion Papers 12-080/3, Tinbergen Institute.
    19. Aida Caldera Sánchez & Dan Andrews, 2011. "To Move or not to Move: What Drives Residential Mobility Rates in the OECD?," OECD Economics Department Working Papers 846, OECD Publishing.
    20. Thiess Büttner, 2017. "Welfare Cost of the Real Estate Transfer Tax," CESifo Working Paper Series 6321, CESifo Group Munich.
    21. Muge Adalet McGowan & Dan Andrews, 2015. "Skill Mismatch and Public Policy in OECD Countries," OECD Economics Department Working Papers 1210, OECD Publishing.
    22. Jacobo Uña-Álvarez & Raquel Arévalo-Tomé & M. Soledad Otero-Giráldez, 2009. "Nonparametric Estimation of Households’ Duration of Residence from Panel Data," The Journal of Real Estate Finance and Economics, Springer, vol. 39(1), pages 58-73, July.
    23. 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.
    24. Zenou, Yves, 2007. "High Relocation Costs in Search-Matching Models: Theory and Application to Spatial Mismatch," IZA Discussion Papers 2739, Institute for the Study of Labor (IZA).
    25. Büttner, Thiess, 2017. "Welfare Cost of the Real Estate Transfer Tax," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168308, Verein für Socialpolitik / German Economic Association.

    More about this item

    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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