Analysis of the Dynamics of Housing Tenure Choice in Britain

(1997) - Pamela Di Salvo, John Ermisch

Journal: Journal of Urban Economics
Link:: https://linkinghub.elsevier.com/retrieve/pii/S0094119096920094
DOI:: 10.1006/juec.1996.2009
Links::
Tags:: #paper #Tenure #NCDS #SocialClass
Cite Key:: [@DiSalvo1997]

Abstract

The study uses data from the 1958 birth cohort, collected in the British National Child Development Study, to model the dynamics of people’s first entry to either owner-occupation or tenancy in social housing, the two major tenures in Britain. The effects of lifetime earnings prospects, family background, a person’s own spells of unemployment, the regional unemployment rate, and regional relative house prices on the timing and pattern of first entry are estimated in the context of a competing risk hazard model. It also shows that, given the observed matrix of subsequent tenure transitions, these impacts on the timing and destination of first major tenure also have important effects on the number of years which a person spends in each tenure over hisrher life.

Notes

“model the dynamics of people’s first entry to either owner-occupation or tenancy in social housing, the two major tenures in Britain” (Di Salvo and Ermisch, 1997, p. 1)

“effects of lifetime earnings prospects, family background, a person’s own spells of unemployment, the regional unemployment rate, and regional relative house prices on the timing and pattern of first entry are estimated in the context of a competing risk hazard model” (Di Salvo and Ermisch, 1997, p. 1)

“We show that even with tenure mobility over a person’s life, the first major tenure choice has a significant impact on the distribution of life-years in each tenure.” (Di Salvo and Ermisch, 1997, p. 2)

“Over 90% of British households are either owner-occupiers 67% or . ‘‘social tenants’’ 24% . The latter primarily includes households who rent their dwelling from local authorities ‘‘public housing’’ in American termi. nology, in which 21% of households live , but it also includes those who . rent from housing associations 3% , which are charitable organizations whose purpose is to provide relatively cheap housing to target groups e.g., . the elderly or poor families . The residual is provided by private landlords.” (Di Salvo and Ermisch, 1997, p. 2)

“Roughly speaking, the hazard is the probability of entering a major tenure in each month conditional on not having entered one before that month. The model which we estimate is a ‘‘proportional hazards’’ model for those who have left continuous full-time education. In other words, the hazard rate is identically zero while the person is still in continuous full-time education” (Di Salvo and Ermisch, 1997, p. 8)

“Estimates of a dynamic model of tenure choice indicate that people with better lifetime earning prospects are more likely to enter owner-occupation and do so earlier in their lives, as we would expect from economic theories of tenure choice” (Di Salvo and Ermisch, 1997, p. 16)

“A person’s own spells of unemployment make it less likely that hershe becomes as owner-occupier.” (Di Salvo and Ermisch, 1997, p. 16)