Valuing homeownership

Khalid Sekkat and Ariane Szafarz

No 09-006.RS, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: Housing tenure decision combines financial, economic and socio-psychological factors. This paper considers the global premium associated to homeownership. On the one hand, homeownership is associated to private benefits of being a landlord. On the other hand, overinvestment in housing is harmful to diversification and distorts portfolio management. This trade-off, similar to the one associated to corporate private benefits of control, is the cornerstone of our theoretical model. Furthermore, the empirical implementation of the model exhibits a homeownership premium for houses in the Brussels Region reaching at least 9% of the housing price. The findings are robust to several methodological refinements.

Keywords: Homeownership; tenure choice; housing; real-estate. (search for similar items in EconPapers)
JEL-codes: E21 G11 R21 (search for similar items in EconPapers)
Pages: 20 p.
Date: 2009-02
New Economics Papers: this item is included in nep-geo and nep-ure
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Citations: View citations in EconPapers (1)

Published by: Université Libre de Bruxelles, Solvay Business School, Centre Emile Bernheim (CEB)

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Related works:
Journal Article: Valuing Homeownership (2011)
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