Underutilized Housing in an Aging Society: How Bequest Motives Affect Housing Choices

54 Pages Posted: 17 Dec 2019 Last revised: 18 Jun 2023

See all articles by Miki Seko

Miki Seko

Keio University - Faculty of Economics

Kazuto Sumita

affiliation not provided to SSRN

Jiro Yoshida

Pennsylvania State University - Smeal College of Business; The University of Tokyo - Graduate School of Economics

Date Written: May 7, 2023

Abstract

This study sheds light on the underutilization of housing stock among elderly households and examines the role played by bequest motives and inheritance taxes. Data from Japanese households reveal that underutilized rooms are prevalent, particularly in non-relocating elderly households who have recently renovated their homes. Our findings indicate that the motive to bequeath housing leads to the underutilization of housing through reduced mobility and increased renovations, even among working-age households. The underutilization of housing by elderly households leads to an inefficient allocation of resources in an aging society and exacerbates the problem of housing affordability.

Keywords: underutilized housing stock, tax distortions, mobility, renovation, aging society, IV probit model, Japan

JEL Classification: J14, H21, R21

Suggested Citation

Seko, Miki and Sumita, Kazuto and Yoshida, Jiro, Underutilized Housing in an Aging Society: How Bequest Motives Affect Housing Choices (May 7, 2023). Available at SSRN: https://ssrn.com/abstract=3496105 or http://dx.doi.org/10.2139/ssrn.3496105

Miki Seko

Keio University - Faculty of Economics ( email )

2-15-45 Mita, Ninato-ku
Tokyo 1088345
Japan

Kazuto Sumita

affiliation not provided to SSRN

Jiro Yoshida (Contact Author)

Pennsylvania State University - Smeal College of Business ( email )

368 Business Building
Smeal College of Business
University Park, PA 16802
United States
814-865-0392 (Phone)
814-865-6284 (Fax)

HOME PAGE: http://www.personal.psu.edu/juy18

The University of Tokyo - Graduate School of Economics ( email )

7-3-1 Hongo
Bunkyo-ku, Tokyo 113-0033
Japan
813-5841-5653 (Phone)
813-5841-5521 (Fax)

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