Housing Wealth Accumulation: The Role of Public Housing
GATE Working Paper Series No. 1343
26 Pages Posted: 9 Jan 2014
Date Written: December 2013
Abstract
The public housing sector provides housing units at below-market rents, potentially allowing its tenants to save for a downpayment more quickly than they would have otherwise. In this paper, we analyze the effect of a spell in public housing on age at first-time homeownership using the French Housing Survey. We use a pseudo-panel approach that takes into account the specificities of the local housing market, to derive individual tenure transitions from multiple cross-sections data. Using an IV strategy to control for a potential selection into public housing, we jointly estimate public housing tenancy and duration before first-time homeownership, and take into account unobserved heterogeneity. Our results indicate that a spell in public housing increases the hazard to homeownership, supporting the idea that, in France, the public housing policy provides an important pathway to homeownership.
Keywords: Homeownership, Public housing, Tenure choice, Duration model, Unobserved heterogeneity
JEL Classification: R21, R31, R38, C41
Suggested Citation: Suggested Citation