Identifying the Benefits from Home Ownership: A Swedish Experiment
66 Pages Posted: 29 May 2016 Last revised: 3 Oct 2017
Date Written: September 27, 2017
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
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