IDEAS home Printed from https://ideas.repec.org/p/fip/fedhpr/885.html

Neighborhood externality risk and the homeownership status of properties

Author

Listed:
  • Christian A. L. Hilber

Abstract

In contrast to corporate and institutional investors with larger asset portfolios, single owner-occupiers cannot adequately diversify real estate risk. They therefore pay a risk premium that increases with the corresponding risk. Ceteris paribus, homeownership should be relatively less attractive in places with higher real estate risk. Using the American Housing Survey, it is documented that neighborhood externality risk, a major component of real estate risk, substantially reduces the probability that a housing unit is owner-occupied, having controlled for MSA-level and center city unobservable characteristics. Depending on the type of externality, model specification and sample used, a decrease of one specific risk variable by one standard deviation increases the probability that a unit is owner-occupied between 1.5 and 12.3 percent. An analysis of units that change their homeownership status suggests that this effect may be causal.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Christian A. L. Hilber, 2003. "Neighborhood externality risk and the homeownership status of properties," Proceedings 885, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhpr:885
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedhpr:885. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lauren Wiese (email available below). General contact details of provider: https://edirc.repec.org/data/frbchus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.