Working Paper: CEPR ID: DP2717
Authors: Maria Concetta Chiuri; Tullio Jappelli
Abstract: We explore the determinants of the international pattern of home ownership using the Luxembourg Income Study (LIS), a collection of microeconomic data on fourteen OECD countries. In most, the cross-section is repeated over time and includes several demographic variables carefully matched between the different surveys. This allows us to construct a truly unique international dataset, merging data on more than 400,000 households with aggregate panel data on mortgage loans and down payment ratios. After controlling for demographic characteristics, country effects, cohort effects and calendar time effects, we find strong evidence that the availability of mortgage finance - as measured by outstanding mortgage loans and down payment ratios - affects the age-profile of home ownership, especially at the young end. The results have important implications for the debate on the relationship between saving and growth.
Keywords: financial markets; home ownership
JEL Codes: G20; R20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| availability of mortgage finance (G21) | age profile of home ownership (R21) |
| down payment ratio (G32) | home ownership rates among young families (R21) |
| mortgage market imperfections (G21) | delays in home purchases for younger households (R21) |
| delays in home purchases for younger households (R21) | overall saving behaviors (D14) |
| availability of mortgage finance (G21) | economic growth (O49) |