Housing Lock: Dutch Evidence on the Impact of Negative Home Equity on Household Mobility

Asaf Bernstein and Daan Struyven

American Economic Journal: Economic Policy, 2022, vol. 14, issue 3, 1-32

Abstract: This paper employs Dutch administrative population data to test the "housing lock hypothesis": the conjecture that homeowners with negative home equity, low levels of financial assets, and restricted opportunities to borrow reduce their mobility. Variation in home equity driven by the timing of home purchase within a municipality and the harshness of Dutch recourse laws facilitates identification of housing lock effects. The 2SLS estimate for the effect of negative home equity is a 74–79 percent decline in mobility, where effects are substantially larger for households with low financial asset holdings or moves over longer distances.

JEL-codes: G51 R21 R23 R31 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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DOI: 10.1257/pol.20150252

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