Open AccessThe effect of homeownership on the option value of regional migration
Author(s) -
Oswald Florian
Publication year - 2019
Publication title -
quantitative economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.062
H-Index - 27
eISSN - 1759-7331
pISSN - 1759-7323
DOI - 10.3982/qe872
Subject(s) - consumption (sociology) , value (mathematics) , economics , econometrics , aggregate (composite) , survey of income and program participation , demographic economics , labour economics , mathematics , statistics , social science , materials science , sociology , composite material
This paper estimates a lifecycle model of consumption, housing choice, and migration in the presence of aggregate and regional shocks, using the Survey of Income and Program Participation (SIPP). The model delivers structural estimates of moving costs by ownership status, age, and family size that complement the previous literature. Using the model, I first show that migration elasticities vary substantially between renters and owners, and I estimate the consumption value of having the option to migrate across regions when there are regional shocks. This value is 19 % of lifetime consumption on average, and it varies substantially with household type.