Second Homes: Households' Life Dream or (Wrong) Investment?

25 Pages Posted: 5 Aug 2015

See all articles by Marianna Brunetti

Marianna Brunetti

Dept. Economics and Finance, University of Rome Tor Vergata; CEFIN

Costanza Torricelli

University of Modena and Reggio Emilia - Department of Economics; Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN); Center for Research on Pensions and Welfare Policies (CeRP)

Date Written: August 4, 2015

Abstract

While purchasing the primary home is mainly motivated by essential consumption needs, a second house has generally been considered a good investment. However, second homes may result in disparate final uses, including unprofitable ones. We contribute to the scant literature on second houses by empirically investigating the cases of unrented second homes, which represent the most notable unprofitable use. We use the 2002-2012 Bank of Italy Survey on Household Income and Wealth which also provides information on real estates actual use. Our results highlight: a gender gap, whereby the unprofitable use is more frequent among male; no association with household’s economic characteristics; and, a strong association with the real estate features, with inherited dwellings more likely to be unprofitably used. Besides casting some doubts on the goodness of second homes as an investment, our results have important policy implications on the housing and rental markets, calling for policy or regulatory interventions.

Keywords: multiple homeownership, second homes, household portfolios, real-estate inheritance

JEL Classification: C25, D1, D14, R2

Suggested Citation

Brunetti, Marianna and Torricelli, Costanza, Second Homes: Households' Life Dream or (Wrong) Investment? (August 4, 2015). CEIS Working Paper No. 351. Available at SSRN: https://ssrn.com/abstract=2639739 or http://dx.doi.org/10.2139/ssrn.2639739

Marianna Brunetti (Contact Author)

Dept. Economics and Finance, University of Rome Tor Vergata ( email )

Via Columbia, 2
Rome, Lazio 00133
Italy

HOME PAGE: http://economia.uniroma2.it/en/def/faculty/178/brunetti-marianna

CEFIN ( email )

via Berengario 51
Modena, modena I-41100
Italy

Costanza Torricelli

University of Modena and Reggio Emilia - Department of Economics ( email )

Viale Berengario 51
41100 Modena, Modena 41100
Italy
+390592056733 (Phone)
+390592056937 (Fax)

HOME PAGE: http://www.economia.unimore.it/torricelli_costanza/index.htm

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN) ( email )

via Berengario 51
Modena, modena I-41100
Italy

Center for Research on Pensions and Welfare Policies (CeRP) ( email )

Via Real Collegio, 30
Moncalieri, Turin 10024
Italy

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