Identifying the Benefits from Home Ownership: A Swedish Experiment

66 Pages Posted: 29 May 2016 Last revised: 3 Oct 2017

See all articles by Paolo Sodini

Paolo Sodini

Stockholm School of Economics - Department of Finance; Swedish House of Finance

Stijn Van Nieuwerburgh

Columbia University Graduate School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); New York University Stern School of Business, Department of Finance

Roine Vestman

Stockholm University - Department of Economics; Swedish House of Finance

Ulf von Lilienfeld‐Toal

Universite du Luxembourg

Multiple version iconThere are 3 versions of this paper

Date Written: September 27, 2017

Abstract

Home ownership is widely stimulated by policy yet its effects are poorly understood. Exploiting privatization decisions of municipally-owned apartment buildings, we obtain random variation in home ownership for otherwise similar buildings with similar tenants. Granular data on demographics, income, housing and financial wealth, and debt allow us to construct high-quality measures of consumption expenditures. Home ownership leads households to increase spending and to smooth consumption in the wake of an adverse income shock. We also find a positive but short-lived effect on labor supply.

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

Sodini, Paolo and Van Nieuwerburgh, Stijn and Vestman, Roine and von Lilienfeld‐Toal, Ulf, Identifying the Benefits from Home Ownership: A Swedish Experiment (September 27, 2017). Swedish House of Finance Research Paper No. 16-11; Paris December 2016 Finance Meeting EUROFIDAI - AFFI. Available at SSRN: https://ssrn.com/abstract=2785741 or http://dx.doi.org/10.2139/ssrn.2785741

Paolo Sodini

Stockholm School of Economics - Department of Finance ( email )

Sveavagen 65, Box 6501
SE-113 83 Stockholm
Sweden
46 8 7369165 (Phone)
46 8 312327 (Fax)

HOME PAGE: http://www.hhs.se/secfi/People/Faculty/Finpso/finp

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

Stijn Van Nieuwerburgh (Contact Author)

Columbia University Graduate School of Business ( email )

3022 Broadway
Uris Hall 809
New York, NY New York 10027
United States

HOME PAGE: http://https://www0.gsb.columbia.edu/faculty/svannieuwerburgh/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

New York University Stern School of Business, Department of Finance ( email )

44 West 4th Street
Suite 9-190
New York, NY 10012-1126
United States

Roine Vestman

Stockholm University - Department of Economics ( email )

Universitetsvägen 10 A
House A, floor 4 and 7
Frescati, Stockholm
Sweden

HOME PAGE: http://www.ne.su.se/

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

Ulf Von Lilienfeld‐Toal

Universite du Luxembourg

L-1511 Luxembourg
Luxembourg

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