82 Pages Posted: 29 May 2016 Last revised: 23 Nov 2016
Date Written: November 21, 2016
This paper studies the economic benefits of home ownership. Exploiting a quasi-experiment surrounding privatization decisions of municipally-owned apartment buildings, we obtain random variation in home ownership for otherwise similar buildings with similar tenants. We link the tenants to their tax records to obtain information on demographics, income, mobility patterns, housing wealth, financial wealth, and debt. These data allow us to construct high-quality measures of consumption expenditures. Home ownership causes households to move up the housing ladder, work harder, and save more. Consumption increases out of housing wealth are concentrated among the home owners who sell subsequent to privatization and among those who receive negative income shocks, evidencing a collateral effect.
Keywords: home ownership, housing wealth, marginal propensity to consume out of housing wealth, privatization of social housing
JEL Classification: D12, D31, E21, G11, H31, J22, R21, R23, R51
Suggested Citation: Suggested Citation
Sodini, Paolo and Van Nieuwerburgh, Stijn and Vestman, Roine and von Lilienfeld‐Toal, Ulf, Identifying the Benefits from Home Ownership: A Swedish Experiment (November 21, 2016). Swedish House of Finance Research Paper No. 16-11; Paris December 2016 Finance Meeting EUROFIDAI - AFFI. Available at SSRN: https://ssrn.com/abstract=2785741