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Determinants of Tenure Choice in Japan: What Makes You a Homeowner?

Author

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  • Aizawa, Toshiaki

    (Asian Development Bank Institute)

  • Helble, Matthias

    (Asian Development Bank Institute)

Abstract

Despite Japan’s highly developed housing market, little is known about the determinants of renter-to-homeowner tenure transition. Exploiting the Japanese longitudinal household data of the Keio Household Panel Survey (2004–2013), this paper aims to close this gap. Our results show that income level and increase in family size are the strongest determinants for homeownership in Japan. We find that although both rural and urban households with higher incomes are more likely to transition to homeownership, access in rural areas is more equally distributed over various income groups. Since most of the previous empirical studies on tenure choice pay little attention to wealth as a measure of purchasing power, possibly due to data limitation, we draw attention to it and its relative levels. We find that household wealth levels matter, particularly in urban areas, whereas in rural areas homeownership is more equally distributed. Nonetheless, given the relatively low levels of household wealth among renters, our results suggest that income is a more important determinant of successful tenure transition.

Suggested Citation

  • Aizawa, Toshiaki & Helble, Matthias, 2016. "Determinants of Tenure Choice in Japan: What Makes You a Homeowner?," ADBI Working Papers 625, Asian Development Bank Institute.
  • Handle: RePEc:ris:adbiwp:0625
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    References listed on IDEAS

    as
    1. Horioka, Charles Yuji, 1988. "Tenure choice and housing demand in Japan," Journal of Urban Economics, Elsevier, vol. 24(3), pages 289-309, November.
    2. Aaronson, Daniel, 2000. "A Note on the Benefits of Homeownership," Journal of Urban Economics, Elsevier, vol. 47(3), pages 356-369, May.
    3. Tan, Teck Hong, 2008. "Determinants of homeownership in Malaysia," MPRA Paper 34950, University Library of Munich, Germany.
    4. Yoshino, Naoyuki & Helble, Matthias & Aizawa, Toshiaki, 2015. "Housing Policies for Asia: A Theoretical Analysis by Use of a Demand and Supply Model," ADBI Working Papers 526, Asian Development Bank Institute.
    5. Josep Raya & Jaume Garcia, 2012. "Which Are the Real Determinants of Tenure? A Comparative Analysis of Different Models of the Tenure Choice of a House," Urban Studies, Urban Studies Journal Limited, vol. 49(16), pages 3645-3662, December.
    6. George Fallis, 1983. "Housing Tenure in a Model of Consumer Choice: A Simple Diagrammatic Analysis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 11(1), pages 30-44, March.
    7. Kan, Kamhon, 2000. "Dynamic Modeling of Housing Tenure Choice," Journal of Urban Economics, Elsevier, vol. 48(1), pages 46-69, July.
    8. Daniere, Amrita, 1992. "Determinants of tenure choice in the third world: An empirical study of Cairo and Manila," Journal of Housing Economics, Elsevier, vol. 2(2), pages 159-184, June.
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    12. Aizawa, Toshiaki & Helble, Matthias, 2015. "Health and Home Ownership: Findings for the Case of Japan," ADBI Working Papers 525, Asian Development Bank Institute.
    13. Linneman, Peter, 1985. "An economic analysis of the homeownership decision," Journal of Urban Economics, Elsevier, vol. 17(2), pages 230-246, March.
    14. Piyush Tiwari & Hiroshi Hasegawa†, 2004. "Demand for Housing in Tokyo: A Discrete Choice Analysis," Regional Studies, Taylor & Francis Journals, vol. 38(1), pages 27-42.
    15. Richard B. Peiser & Lawrence B. Smith, 1985. "Homeownership Returns, Tenure Choice and Inflation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 13(4), pages 343-360, December.
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    17. Tan, Teck Hong, 2008. "Determinants of homeownership in Malaysia," MPRA Paper 34909, University Library of Munich, Germany.
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    More about this item

    Keywords

    homeownership; housing tenure; tenure choice in Japan; Japanese homeowner;

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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