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Abstract:

cover
SERC/Urban and Spatial Programme Discussion Paper
Do Long Distance Moves Discourage Homeownership? Evidence from England
Sejeong Ha and Christian A. L. Hilber
September 2013
Paper No' SERCDP0141:
Full Paper (pdf)

JEL Classification: J61; R21; R23


Tags: residential mobility; distance of residential relocation; information cost; investment risk; homeownership; tenure choice

We hypothesize that as the distance of a residential move increases, the cost of collecting information on the destination housing market rises, the amount and quality of information collected fall, and the chances of making an ill-informed housing purchase decision increases, reducing the likelihood of such a purchase. Since owning relative to renting is associated with a much larger financial commitment and much higher transaction costs, the propensity to own can be expected to decrease with the distance moved. Using data from the Survey of English Housing from 1993 to 2008, we document that, consistent with our prior, an increase in the distance moved by one standard deviation decreases the probability that a household owns the next home by 3.2 percentage points.