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Staying Together for the Sake of the Home? House Price Shocks and Partnership Dissolution in the UK

  • Helmut Rainer
  • Ian Smith

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 e ects 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 e ect in general. The destabilizing e ect 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: http://www.st-andrews.ac.uk/economics/papers/dp0809.pdf
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Paper provided by Department of Economics, University of St. Andrews in its series Discussion Paper Series, Department of Economics with number 200809.

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Date of creation: 15 Aug 2008
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Handle: RePEc:san:wpecon:0809
Contact details of provider: Postal: School of Economics and Finance, University of St. Andrews, Fife KY16 9AL
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