Identifying the Benefits from Home Ownership: A Swedish Experiment

122 Pages Posted: 29 May 2016 Last revised: 14 Jul 2021

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); ABFER

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: July 14, 2021

Abstract

Homeownership is widely stimulated by policy yet its economic effects are poorly understood. We exploit quasi-random variation in homeownership generated by privatization decisions of municipally-owned buildings, and use granular data on demographics, income, housing, financial wealth, and debt that allow us to construct high-quality measures of spending. Homeownership causes wealth building via house price appreciation, increases consumption, and improves consumption smoothing across time and states of the world through a collateral effect. It increases mobility for young households, who move up the property ladder, and amplifies wealth accumulation for older households, who take more risk in their financial portfolio.

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 (July 14, 2021). 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

ABFER ( email )

BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore

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

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
528
Abstract Views
3,114
rank
61,843
PlumX Metrics