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Staying together for the sake of the home? House price shocks and partnership dissolution in the UK

  • Rainer, Helmut
  • Smith, Ian

This paper explores the importance of unanticipated house price shocks for marital dissolution in the UK using individual household data from the British Household Panel Survey (BHPS) and county-level house price data from the Halifax House Price Index (HHPI). Results suggest that positive and negative house price shocks have asymmetric effects on the probability of partnership dissolution. Negative house price shocks significantly increase the risk of partnership dissolution, while positive house price shocks do not have a significant effect in general. The destabilizing effect of negative house price shocks is particularly pronounced for couples with dependent children, low family income, and high mortgage debt. Results are robust to a wide variety of specifications.

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File URL: https://www.iser.essex.ac.uk/research/publications/working-papers/iser/2008-31.pdf
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Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2008-31.

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Date of creation: 01 Sep 2008
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Publication status: published
Handle: RePEc:ese:iserwp:2008-31
Contact details of provider: Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
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  1. Campbell, John Y. & Cocco, Joao F., 2007. "How do house prices affect consumption? Evidence from micro data," Journal of Monetary Economics, Elsevier, vol. 54(3), pages 591-621, April.
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