Rent or Buy? The Role of Lifetime Experiences on Homeownership within and across Countries

Ulrike M. Malmendier and Alex Steiny Wellsjo

No 14935, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: What explains the vast differences in homeownership rates across and within countries? We argue that individual lifetime exposure to inflation play a significant role in the decision to become homeowner. First, we show that immigrants' country-of-origin inflation experiences predict their homeownership rates in the US. Second, using household data from 20 European countries, we estimate that a one log-point increase in personally experienced inflation predicts a 19pp increase in the average individual's likelihood of homeownership. The relationship between homeownership and experienced inflation is robust to other determinants of homeownership as well as any differences across countries and over time.

JEL-codes: D03 D14 D83 D84 E03 E21 G02 G11 R31 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://cepr.org/publications/DP14935 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

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:cpr:ceprdp:14935

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP14935

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().