Working Paper: NBER ID: w2471
Authors: Jonathan Feinstein; Daniel McFadden
Abstract: Using Waves one through fifteen of the PSID data set, we investigate the pattern of housing mobility amongst the elderly. We focus especially on two issues: (1) Determining which household characteristics tend to increase the probability of a move; and (2) Whether elderly households systematically move to smaller, less expensive dwellings when they do move, and, if so, which characteristics make such "downsizing" particularly likely. We find that wealthier households are less likely to move and to downsize, and that changes in family composition or retirement status significantly increase the likelihood of a move. We do not find much evidence of imperfections in the housing market, or of pervasive liquidity constraints. Finally, we develop a Lagrange Multiplier test for unobserved heterogeneity amongst elderly households, and strongly reject the null hypothesis of homogeneity.
Keywords: Housing Demand; Elderly; Wealth; Demographics; Mobility
JEL Codes: J14; R21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Household wealth (G59) | Likelihood of moving (J62) |
| Changes in family composition (J12) | Likelihood of moving (J62) |
| Liquidity constraints (E51) | Likelihood of moving (J62) |