Regional Shocks, Migration and Homeownership

Florian Oswald
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Florian Oswald: UCL

No 759, 2015 Meeting Papers from Society for Economic Dynamics

Abstract: This paper estimates a lifecycle model of consumption, housing choice and migration in the presence of aggregate and regional shocks, using the Survey of Income and Program Participation (SIPP). Using the model I estimate the value of the migration option and the welfare impact of policies that may restrict mobility. The option to move is equivalent to 4.4% of lifetime consumption. I also find that, were the mortgage interest-rate deduction to be eliminated, the aggregate migration rate would increase only marginally by 0.1%. Following a general equilibrium correction, house prices are reduced by 5%, which results in a 1% increase in home ownership. In a new steady state the elimination of the deduction is equivalent to an increase of 2.4% of lifecycle consumption.

Date: 2015
New Economics Papers: this item is included in nep-dge, nep-mig and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed015:759

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