Do Households Use Homeownership To Insure Themselves? Evidence across US Cities
Michael Amior and
Jonathan Halket
Additional contact information
Jonathan Halket: UCL
No 276, 2011 Meeting Papers from Society for Economic Dynamics
Abstract:
Are households more likely to be homeowners when “housing risk” is higher? We show that homeownership rates and loan-to-value (LTV) ratios at the city level are strongly negatively correlated with house price levels and the variance of house price growth rates in the city. But both price levels and the variance of their growth rates are themselves correlated with the relative value of land in the city, even when land value is instrumented for using topographic measures. We disentangle the contributions of high prices from high variances by building a life-cycle model of homeownership choices. The model is able to explain much of the cross-city dispersion in homeownership and LTV. We find that higher price levels explain the lower homeownership while higher risk explains the lower LTV in high land value cities. The variation in LTV with risk highlights the importance of including other means of insurance in models of homeownership.
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (8)
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Related works:
Journal Article: Do households use home‐ownership to insure themselves? Evidence across U.S. cities (2014) 
Working Paper: Do households use home-ownership to insure themselves? Evidence across U.S. cities (2014) 
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:red:sed011:276
Access Statistics for this paper
More papers in 2011 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().