Decreasing house prices and household mobility: An empirical study on loss aversion and negative equity

Joep Steegmans and Wolter Hassink

Journal of Regional Science, 2018, vol. 58, issue 3, 611-634

Abstract: This paper examines the effects of loss aversion and negative equity on household mobility. We stress the importance of studying these mechanisms simultaneously. By making use of a unique administrative data set of Statistics Netherlands, covering the period 2006–2011, we estimate the effects of loss aversion and negative equity. The results provide strong evidence for loss aversion, while less evidence is found for a lock‐in effect of negative equity. The results indicate that moderately underwater households do have a lower mobility, but heavily underwater households do not. Additional results indicate that the particularly high mobility of heavily underwater households is not default‐driven.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://doi.org/10.1111/jors.12380

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jregsc:v:58:y:2018:i:3:p:611-634

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0022-4146

Access Statistics for this article

Journal of Regional Science is currently edited by Marlon G. Boarnet, Matthew Kahn and Mark D. Partridge

More articles in Journal of Regional Science from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().