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Housing Mobility and Downsizing at Older Ages in Britain and the United States

Author

Listed:
  • Banks, James

    (Institute for Fiscal Studies, London)

  • Blundell, Richard

    (University College London)

  • Oldfield, Zoë

    (Institute for Fiscal Studies, London)

  • Smith, James P.

    (RAND)

Abstract

This paper investigates the effects of housing price risk on housing choices over the life-cycle. Housing price risk can be substantial but, unlike other risky assets which people can avoid, the fact that most people will eventually own their home creates an insurance demand for housing assets early in life. Our contribution is to focus on the importance of home ownership and housing wealth as a hedge against future house price risk for individuals moving up the ladder – people living in places with higher housing price risk should own their first home at a younger age, should live in larger homes, and should be less likely to refinance. These predictions are tested and shown to hold using panel data from the United States and Great Britain.

Suggested Citation

  • Banks, James & Blundell, Richard & Oldfield, Zoë & Smith, James P., 2010. "Housing Mobility and Downsizing at Older Ages in Britain and the United States," IZA Discussion Papers 5168, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5168
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    Cited by:

    1. Viola Angelini & Agar Brugiavini & Guglielmo Weber, 2014. "The dynamics of homeownership among the 50+ in Europe," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(3), pages 797-823, July.
    2. James Banks & Elaine Kelly & James P. Smith, 2014. "Spousal Health Effects: The Role of Selection," NBER Chapters, in: Discoveries in the Economics of Aging, pages 255-279, National Bureau of Economic Research, Inc.
    3. Alessandro Bucciol & Raffaele Miniaci, 2011. "Household Portfolios and Risk Bearing over Age and Time," Working Papers 15/2011, University of Verona, Department of Economics.
    4. Marco Angrisani & Jinkook Lee, 2016. "Health Effects of Short‐Term Fluctuations in Macroeconomic Conditions: The Case of Hypertension for Older Americans," Health Economics, John Wiley & Sons, Ltd., vol. 25(S2), pages 113-125, November.

    More about this item

    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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