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Legacies of homeownership: Housing wealth and bequests

Jaclene Begley

Journal of Housing Economics, 2017, vol. 35, issue C, 37-50

Abstract: This paper examines the effect of housing price shocks during the recent housing boom and bust on the bequest behavior of older homeowners. Prior studies find that illiquid assets have a strong expected influence on bequests, which suggests volatile housing markets will alter household bequest expectations, particularly since housing is generally the largest share of household wealth. I calculate shocks to housing wealth as the deviation in values from their growth trend over the last three years, and I exploit the geographic variation in housing market volatility to explore the relationship between housing value shocks and bequest expectations over the housing boom and bust. I find that housing price shocks, and especially negative shocks, have a consistent influence on bequest expectations for homeowners, particularly for older homeowners, and for those without stocks. A complementary analysis of elasticities also reveals a larger influence of housing values on bequests than other forms of wealth.

Keywords: Housing markets; Homeownership; Wealth; Bequests; Older adults (search for similar items in EconPapers)
JEL-codes: J14 R20 R31 D14 G01 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1016/j.jhe.2016.12.002

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