Evolution and Determinants of Rent Burdens in Germany

31 Pages Posted: 17 Dec 2015

See all articles by Teresa Backhaus

Teresa Backhaus

University of Bonn - Department of Economics

Kathrin Gebers

Karlsruhe Institute of Technology

Carsten Schröder

Free University of Berlin (FUB) - Department of Business and Economics

Date Written: December 1, 2015

Abstract

The affordability of housing has become a major topic of discussion in Germany among both social scientists and the public at large. Using data from the German Socio-Economic Panel (SOEP), we provide rent-income ratios over more than two decades and show how they change with households’ disposable needs-adjusted income. We find a substantial increase in the ratios over the 1990s. In the decade that followed, they remained relatively constant. Moreover we find that rent-income ratios decrease in income at a decreasing rate, suggesting that rising square-meter prices put particular financial pressure on low-income households. Our analysis also indicates economies of scale from shared living space for multi-member households.

JEL Classification: D1, D3, D6, I3, O18

Suggested Citation

Backhaus, Teresa and Gebers, Kathrin and Schröder, Carsten, Evolution and Determinants of Rent Burdens in Germany (December 1, 2015). SOEP Paper No. 806, Available at SSRN: https://ssrn.com/abstract=2704294 or http://dx.doi.org/10.2139/ssrn.2704294

Teresa Backhaus (Contact Author)

University of Bonn - Department of Economics ( email )

Bonn
Germany

Kathrin Gebers

Karlsruhe Institute of Technology ( email )

Kaiserstraße 12
Karlsruhe, Baden Württemberg 76131
Germany

Carsten Schröder

Free University of Berlin (FUB) - Department of Business and Economics ( email )

Boltzmannstrasse 20
D-14195 Berlin, 14195
Germany
+49 030 838-52259 (Phone)
+49 030 838-52560 (Fax)

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