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The Relation Between Financial and Housing Wealth of Dutch Households

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  • Hochgürtel, S.
  • van Soest, A.H.O.

    (Tilburg University, Center For Economic Research)

Abstract

We analyze households' joint investment decisions for financial wealth and homes.In our bivariate censored regression model with endogenous switching, fixed costs or transaction costs are captured by a threshold that has to be passed before the purchase.The model allows for spill-over effects of a binding threshold for one asset on the demand for the other asset.We find that tenure choice affects the level of financial wealth.Our results do not support the view that people first accumulate financial wealth before acquiring homes.This can be due to the absence of down payment constraints in the Netherlands.

Suggested Citation

  • Hochgürtel, S. & van Soest, A.H.O., 1996. "The Relation Between Financial and Housing Wealth of Dutch Households," Discussion Paper 1996-82, Tilburg University, Center for Economic Research.
  • Handle: RePEc:tiu:tiucen:db5f1307-aa5a-4a4b-bec2-fc8a8b567e89
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    References listed on IDEAS

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    Cited by:

    1. Perraudin, William R. M. & Sorensen, Bent E., 2000. "The demand for risky assets: Sample selection and household portfolios," Journal of Econometrics, Elsevier, vol. 97(1), pages 117-144, July.

    More about this item

    Keywords

    housing; household economics; The Netherlands;

    JEL classification:

    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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