Genetics, Homeownership, and Home Location Choice

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