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The Relation Between Financial and Housing Wealth of Dutch Households

Listed author(s):
  • Hochgürtel, S.
  • van Soest, A.H.O.

    (Tilburg University, Center For Economic Research)

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.

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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1996-82.

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Date of creation: 1996
Handle: RePEc:tiu:tiucen:db5f1307-aa5a-4a4b-bec2-fc8a8b567e89
Contact details of provider: Web page: http://center.uvt.nl

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  17. Mankiw, N. Gregory & Weil, David N., 1989. "The baby boom, the baby bust, and the housing market," Regional Science and Urban Economics, Elsevier, vol. 19(2), pages 235-258, May.
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  19. Polinsky, A Mitchell & Ellwood, David T, 1979. "An Empirical Reconciliation of Micro and Grouped Estimates of the Demand for Housing," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 199-205, May.
  20. Nelson, Forrest D., 1977. "Censored regression models with unobserved, stochastic censoring thresholds," Journal of Econometrics, Elsevier, vol. 6(3), pages 309-327, November.
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  23. Holmans, A. E., 1994. "House prices, land prices, the housing market and house purchase debt in the UK and other countries," Economic Modelling, Elsevier, vol. 11(2), pages 157-199, April.
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