Social Interaction and the transition into homeownership: Evidence from the UKHLS

Oluwaseun Fajana, Chen Zheng and Masaki Mori

ERES from European Real Estate Society (ERES)

Abstract: Rethinking the claim on the negative association between social interaction and the decision to move into homeownership from renting. A hypothetical shortcoming of related literature is that social interaction is taken as exogenous while neglecting the problem of moral hazards, arising from information asymmetry. In this paper, these shortcomings are confronted conceptually with reference to Gronevetter(1973) tie strenghth hypothesis and empirically using the self-reported panel information from a representative British household panel. The conclusions suggest that the value of social interaction for homeownership may be uncovered, where it is observed indirectly in the individual’s utility function, as an other-regarding preference rather than directly in the individuals’ deep preferences for homeowenrship. Consequences for social and housing policy are further discussed.

Keywords: Decision Framing; Homeownership; Information Diffusion; Word of Mouth (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2022-01-01
New Economics Papers: this item is included in nep-upt and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:2022_166

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