Housing purchases and the dynamics of housing wealth

Olympia Bover (olympia.bover@gmail.com)

No 8128, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: I model the purchase behavior of main and secondary housing by Spanish households using the panel sample from the first two waves of the Spanish household finance survey (EFF). I estimate discrete hazard models using retrospective and within-period purchase sequences. I also estimate an (S,s) model combining transactions data with longitudinal information on household wealth and housing stock values. I look at the role of adaptive expectations about the rate of return on housing and find they have a positive and significant effect on the demand for houses. This is true for historical and within-period purchase probabilities as well as for the target ratio of housing wealth to total wealth. The volatility of house price growth has a negative effect on purchases for investment but a positive one on purchases for consumption.

Keywords: (s; S) rule; Adaptive expectations; House purchases; Household finance; Housing returns; Secondary homes (search for similar items in EconPapers)
JEL-codes: D14 G11 (search for similar items in EconPapers)
Date: 2010-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Housing purchases and the dynamics of housing wealth (2010)
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