Spatial Lock-in: Do Falling House Prices Constrain Residential Mobility?

Chan, Sewin

doi:10.1006/juec.2000.2205

Cited by 238 publications

(178 citation statements)

References 32 publications

Supporting

Mentioning

169

Contrasting

Order By: Relevance

“…Such housing equity constraints have been shown in previous research to be an impediment to residential mobility (e.g. Genesove and Mayer, 1997;Henley, 1998;Chan, 2001;and Ferreira, Gyourko, and Tracy, 2010). Second, couples may be averse to selling their homes when prices are declining if they exhibit loss aversion (Kahneman and Tversky, 1979).…”

Section: B Predicted Effects Of House-price Changes On Divorcementioning

confidence: 87%

See 1 more Smart Citation

House Prices and Marital Stability

Farnham

Schmidt

Sevak

2011

American Economic Review

View full text Add to dashboard Cite

We investigate the effect of house price changes on MSA-level divorce rates using data for 1991-2010 from the Current Population Survey and the Federal Housing Finance Agency. Our findings suggest that changing house prices significantly affect divorce rates, and that these effects are asymmetric with respect to housing gains versus losses. In addition, we find differential effects for groups that are more likely to be homeowners versus renters. Some of this evidence is consistent with homeowners being locked into their homes by increased transactions costs in down markets.3

show abstract

Section: B Predicted Effects Of House-price Changes On Divorcementioning

confidence: 87%

“…Empirical evidence in support of nominal loss aversion restricting residential mobility includes Chan (2001), Genesove and Mayer (2001), and Engelhardt (2003). Third, empirical evidence (e.g.…”

Section: B Predicted Effects Of House-price Changes On Divorcementioning

confidence: 99%

House Prices and Marital Stability

Farnham

Schmidt

Sevak

2011

American Economic Review

View full text Add to dashboard Cite

show abstract

“…While housing prices clearly matter for moves in both cases, we are primarily interested in their effect on migration at the scale of metropolitan areas, counties, and states. Intra-area studies that examine effects of housing prices on household location decisions include Chan (2001), So et al (2001), Engelhardt (2003), Seig et al (2004), andFerreira et al (2010). 2 Chen and Rosenthal (2008) construct area-level quality of life indices that reflect wages and housing prices.…”

Section: Introductionmentioning

confidence: 99%

Housing prices and inter-urban migration

Plantinga

Détang-Dessendre

Hunt

et al. 2013

Regional Science and Urban Economics

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Understanding the causes and consequences of human migration has long been of interest to urban and regional economists. Empirical studies build on the theoretical results of Roback (1982) and Mueser and Graves (1995) by estimating the effects of wages, housing prices, and amenities on inter-area migration. Findings with respect to amenities are clear (e.g., Rappaport 2007), and household-level studies consistently find that relative wages or incomes increase the probability that a household will select a given location (e.g., Berger and Blomquist 1992). In contrast, the results for housing prices are inconclusive. Studies that include area-level measures (e.g., median housing price for a metropolitan area) find a mix of negative, positive, and insignificant effects on inter-area migration decisions (e.g., Hunt and Mueller 2004). Many migration studies exclude housing price measures. Terms of use: Documents inThe purpose of this paper is to investigate the role of housing prices in influencing inter-urban household migration decisions. An important contribution of the study is the development of a new method for representing housing prices in migration analyses. Following the approach commonly used to model wages in studies of household migration, we identify the form of the utility function for which individual-specific housing prices can be predicted for unselected areas as a function of individual characteristics. Our theoretical results guide the development of an empirical measure of housing costs that accounts for the decision to own or rent and the cost of holding housing capital.We test our housing cost measure using the 2000 PUMS to identify point-to-point migration decisions for a large sample of college-educated males residing in 291 U.S. metropolitan areas. We estimate conditional logit models of metropolitan area choice, controlling for wages, a large range of amenities, and expected housing costs. Our key finding is that our proposed housing cost measure yields the expected results (higher housing prices reduce the probability that an area is selected), which is robust to alternative specifications and samples. We re-estimate our model using three alternative metropolitan area measures of housing costs: median house price, average apartment rent, and average urban land rent. We find that these measures consistently yield counterintuitive results. 3 Housing Prices and Inter-urban Migration

show abstract

“…A number of studies conducted prior to the Great Recession typically found housing market declines reduced geographic mobility (Quigley 1987;Stein 1995;Henley 1998;Mayer 1997, 2001;Chan 2001;and Engelhardt 2003). However, much of that earlier research was restricted in terms of the geographic area studied (for example, New York City), the temporal horizon for moving (for instance, an eightyear time horizon), or the demographic group that was affected (for example, younger households).…”

Section: Earnings (See Congressional Budget Office 2007; Van Horn Andmentioning

confidence: 99%

Are American homeowners locked into their houses? The impact of housing market conditions on state-to-state migration

Modestino

Dennett

2013

Regional Science and Urban Economics

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. U.S. policymakers are concerned that negative home equity arising from the severe housing market decline may be constraining geographic mobility and consequently serving as a factor in the nation's persistently high unemployment rate. Indeed, the widespread drop in house prices since 2007 has increased the share of homeowners who are underwater on their mortgages. At the same time, migration across states and among homeowners has fallen sharply. Using a logistic regression framework to analyze data from the Internal Revenue Service on state-to-state migration between 2006 and 2009, the authors discover evidence that "house lock" decreases mobility but find it has a negligible impact on the national unemployment rate. A one-standard deviation increase in the share of underwater nonprime households in the origin state reduces the outflow of migrants from the origin to the destination state by 2.9 percent. When aggregated across the United States, this decrease in mobility reduces the national state-to-state migration rate by 0.05 percentage points, resulting in roughly 110,000 to 150,000 fewer individuals migrating across state lines in any given year. Assuming that all of these discouraged migrants were job-seekers who were previously unemployed before relocating and then found a job in their new state would reduce the nation's unemployment rate by at most one-tenth of a percentage point in a given year. The cumulative effect over this period would yield an unemployment rate of 9.0 percent versus 9.3 percent in 2009. Recognizing that not all state-to-state migrants are job-seekers, not all jobseekers were previously unemployed, and not all previously unemployed job-seekers will successfully find work in their new location yields an unemployment rate that is virtually unchanged from the actual one that prevailed from 2006 to 2009. Terms of use: Documents in JEL Classifications: J61, R23

show abstract

Spatial Lock-in: Do Falling House Prices Constrain Residential Mobility?

Cited by 238 publications

References 32 publications

House Prices and Marital Stability

House Prices and Marital Stability

Housing prices and inter-urban migration

Are American homeowners locked into their houses? The impact of housing market conditions on state-to-state migration

Contact Info

Product

Resources

About