Discussion of “Home Ownership and Social Mobility� by Blanden and Machin David Genesove Hebrew University of Jerusalem and CEPR
Chambers, Garriga and Schalgenhauf (2014)
Fetter (2013, 2014)
Ortalo Magne and Rady (1999), citing Simons:
Age/Year 1983
1988
1993
20-29
46.1
60.5
50.1
30-39
71.8
71.9
68.8
• Ortalo Magne and Rady (2006) – starter homes and credit constraints • Sinai and Souleles – ownership as a hedge against rent risk • Amior and Halket, 2014 – test of S&S
Owners versus Owner-Occupants
Marker, Mechanism or Object of Interest? • “housing as marker of wealth” • Markers need to be stable • Marginal distribution unstable; • home ownership conditional on wealth (or rank of wealth) unstable?
• Intergenerational transmission of the marker does not imply IT of object (even conditional on income, etc.) • Taste • Geographical Difference
• Mechanism: “rising housing values [home owner] parents … able to offer direct financial support for home purchase.” • Mechanism: financial accumulation due to saving of rental costs • Mortgages
• where
Lived in owner-occupied home as child
0
0
.01
.01
Fraction .02
Fraction .02
.03
.03
.04
.04
Did not live in owner-occupied home as child
-6
-4
-2
c
0
2
4
-5
0
c
5
Some explanations for changes in marginal distribution • Delayed adolescence • Urbanization • Mortgage interest tax deductibility • Introduced 1969 • Made somewhat more attractive in 1983, somewhat less in 1988 • Eliminated (for new borrowers?) in 2000
• Mortgage market liberalization in 1980s • Reduction of social housing