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Liquidity Constraints, Wealth Transfers and Home Ownership

67 Pages Posted: 15 Sep 2016  

Kristian Blickle

University of St. Gallen - School of Finance

Martin Brown

University of St. Gallen - Swiss Institute of Banking and Finance

Date Written: September 15, 2016

Abstract

We study the impact of liquidity constraints on home ownership by comparing the tenure and housing choice of households who receive intra-family wealth transfers to those that do not. Our analysis is based on household-level panel data providing annual information on household characteristics, wealth transfers, tenure status as well as changes in the size and quality of housing. Our treatment effect estimates suggest that wealth transfers increase the propensity of households to transition to ownership by 15 to 20 percentage points. By contrast, wealth transfers do not increase the likelihood that existing homeowners “trade-up” to larger homes in better locations.

Keywords: Liquidity Constraints, Tenure Choice, Wealth Transfers, Macroprudential Policy

JEL Classification: D14, D31, D91, G18

Suggested Citation

Blickle, Kristian and Brown, Martin, Liquidity Constraints, Wealth Transfers and Home Ownership (September 15, 2016). University of St. Gallen, School of Finance Research Paper No. 2016/18. Available at SSRN: https://ssrn.com/abstract=2839217 or http://dx.doi.org/10.2139/ssrn.2839217

Kristian Blickle

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St.Gallen, CH-9000
Switzerland

Martin Brown (Contact Author)

University of St. Gallen - Swiss Institute of Banking and Finance ( email )

Unterer Graben 21
St. Gallen, CH-9000
Switzerland

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