Genetics, Homeownership, and Home Location Choice

38 Pages Posted: 29 Jun 2011 Last revised: 16 May 2012

See all articles by Henrik Cronqvist

Henrik Cronqvist

University of Miami - Department of Finance

Florian Münkel

Saint Mary's University, Canada - Department of Finance, Information Systems & Management Science; University of Washington - Michael G. Foster School of Business

Stephan Siegel

University of Washington - Michael G. Foster School of Business; CESifo

Multiple version iconThere are 2 versions of this paper

Date Written: May 13, 2012

Abstract

We find that a significant proportion of the cross-sectional variation in the choice to own or rent is attributable to a genetic factor, while parental influence is not not found to affect this choice. We also find evidence of gene-environment interactions: The environment moderates genetic effects on homeownership in that growing up in a wealthier family results in a relatively stronger expression of genetic predispositions, while idiosyncratic life experiences appear to explain a larger portion of the variation in homeownership among those who grew up in a less wealthy family environment. Furthermore, we find that home location choices, for example a familiar home location close to one's birthplace and an urban versus a rural home location, are explained by both genetic factors and parental influence. Because we control for an extensive set of individual characteristics analyzed in existing research, an interpretation of our evidence is that individuals' preferences with respect to homeownership and home location are partly genetic. The findings contribute to a deeper understanding of the factors that explain individual behavior with respect to the housing market, and add to an expanding literature on the biological and genetic factors that influence individuals' economic and financial decisions.

Keywords: Homeownership, Home location choice, Real estate, Housing, Genetics

Suggested Citation

Cronqvist, Henrik and Münkel, Florian and Siegel, Stephan, Genetics, Homeownership, and Home Location Choice (May 13, 2012). Available at SSRN: https://ssrn.com/abstract=1874503 or http://dx.doi.org/10.2139/ssrn.1874503

Henrik Cronqvist

University of Miami - Department of Finance ( email )

5250 University Drive
314-E Jenkins Building
Coral Gables, FL 33146
United States
(305) 284-9482 (Phone)

HOME PAGE: http://sites.google.com/site/henrikcronqvist/

Florian Münkel

Saint Mary's University, Canada - Department of Finance, Information Systems & Management Science

923 Robie St.
Halifax, Nova Scotia B3H 3C3
Canada

University of Washington - Michael G. Foster School of Business ( email )

Box 353226
Seattle, WA 98195-3226
United States

Stephan Siegel (Contact Author)

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States

HOME PAGE: http://faculty.washington.edu/ss1110/

CESifo ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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