Households' Portfolio Behavior in France : the Role of Housing

The two-dimensional aspects of dwellings occupied by their owner, consumption and investment, make the analysis of households' portfolio choice and the analysis of housing purchases more difficult. But it seems difficult to analyze portfolio decisions without taking account of owner-occupied housing that, for instance, influences greatly assets demand over the life cycle. In this paper we estimated a portfolio choice model where the different dwellings are defined as assets. First, housings show some specificities in households' wealth accumulation. The probability of holding primary residence follows a hump-shaped age profile, well interpreting within the life cycle hypothesis. Moreover, housing assets are in households' portfolios for a quite low level of wealth while transferable securities attract primarily the wealthiest households. Then, we showed that it seems difficult to analyze portfolio decision over the life cycle without taking account of the process of accumulation of owner-occupied housing. Especially, risky assets demand should be greatly influenced by attitudes towards home property. For instance, financial portfolio of young (less wealthy) households would be less risky than older people if the formers want to be homeowner because of preferential tax treatments.