Housing Wealth Accumulation: The Role of Public Housing

GATE Working Paper Series No. 1343

26 Pages Posted: 9 Jan 2014

Date Written: December 2013

Abstract

The public housing sector provides housing units at below-market rents, potentially allowing its tenants to save for a downpayment more quickly than they would have otherwise. In this paper, we analyze the effect of a spell in public housing on age at first-time homeownership using the French Housing Survey. We use a pseudo-panel approach that takes into account the specificities of the local housing market, to derive individual tenure transitions from multiple cross-sections data. Using an IV strategy to control for a potential selection into public housing, we jointly estimate public housing tenancy and duration before first-time homeownership, and take into account unobserved heterogeneity. Our results indicate that a spell in public housing increases the hazard to homeownership, supporting the idea that, in France, the public housing policy provides an important pathway to homeownership.

Keywords: Homeownership, Public housing, Tenure choice, Duration model, Unobserved heterogeneity

JEL Classification: R21, R31, R38, C41

Suggested Citation

Goffette-Nagot, Florence and Sidibe, Modibo, Housing Wealth Accumulation: The Role of Public Housing (December 2013). GATE Working Paper Series No. 1343, Available at SSRN: https://ssrn.com/abstract=2376262 or http://dx.doi.org/10.2139/ssrn.2376262

Florence Goffette-Nagot (Contact Author)

University of Lyon 2 ( email )

93, chemin des Mouilles
Ecully, 69130
France

Modibo Sidibe

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

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