Wealth Accumulation and Housing Choices of Young Households: An Exploratory Investigation

59 Pages Posted: 11 Jun 2000 Last revised: 9 May 2015

Donald R. Haurin

Ohio State University (OSU) - Economics

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate ; University of Pennsylvania - Finance Department

Patric H. Hendershott

University of Aberdeen - Centre for Property Research; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: March 1995

Abstract

This paper describes the wealth accumulation of American youth and relates this behavior to their eventual housing choices. We develop a data set that links wealth profiles of youth with constant- quality house prices and tenure choice. A panel data set is compiled for youth age 20-33 for the years 1985 through 1990. We construct wealth profiles for each household over the six year period and indicate how wealth varies with labor supply, marriage, fertility, gender, education, race/ethnicity, and tenure choice. We find renters' wealth accumulates rapidly in the year before and year of first homeownership. The factors related to this increase are marriage, increased labor supply by married women, and gifts/inheritances. Of particular interest is the finding of an inverse U-shaped relationship between the local real price of housing and middle and upper income renters' wealth and married female labor supply. Also, youth in high housing cost localities tend to live in groups at a greater rate compared to those in low cost areas.

Suggested Citation

Haurin, Donald R. and Wachter, Susan M. and Hendershott, Patric H., Wealth Accumulation and Housing Choices of Young Households: An Exploratory Investigation (March 1995). NBER Working Paper No. w5070. Available at SSRN: https://ssrn.com/abstract=225848

Donald R. Haurin (Contact Author)

Ohio State University (OSU) - Economics ( email )

154 N. Oval Mall
1010G Derby Hall
Columbus, OH 43210-1172
United States
614-292-0482 (Phone)
614-292-9530 (Fax)

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104-6330
United States
215-898-6355 (Phone)

HOME PAGE: http://real.wharton.upenn.edu/~wachter/index.html

University of Pennsylvania - Finance Department ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States

HOME PAGE: http://real.wharton.upenn.edu/~wachter/index.html

Patric H. Hendershott

University of Aberdeen - Centre for Property Research ( email )

Aberdeen AB24 2UF
Scotland

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
46
Abstract Views
1,642
PlumX