Individual homelessness: Entries, exits, and policy

Abstract

a b s t r a c tHomelessness is part of the lives of many people. But almost no one is homeless for all or most of his or her life. The median shelter homeless spell is well under a month, and even ''chronic homelessness'' officially entails spells of a year or so. I model homelessness as part of people's lives in a dynamic stochastic framework in continuous time. I can explain many empirical regularities with a parsimonious model: for instance, why the last addresses of homeless people are concentrated in a few low-rent neighborhoods, why homeless entries are hard to predict, why recidivism is common and past homelessness is a good predictor of future homelessness, why some groups recidivate more often than others, why the hazard rate for shelter exit is single-peaked, why effective homelessness prevention programs do not alter the average length of homeless spells. I also examine policy. The optimal homelessness prevention program is Pigouvian and starkly simple. With an optimal prevention program in place, optimal shelter quality maximizes a simple and intuitive expression, and insurance programs always raise social welfare. Most of the previous economics literature about homelessness has been static, but most literature about homelessness outside economics has been dynamic. This paper tries to bring the two strands of literature closer together.

A Journey Home: What Drives How Long People Are Homeless?

“…Exit rates out of homelessness initially rise and then fall again. This pattern is consistent with O'Flaherty's (2012) theoretical model in which the relative value that homeless households place on being housed evolves over time and there is a fixed cost associated with leaving homelessness. Given these circumstances, O'Flaherty's model predicts that the baseline hazard function will be concave with a single maximum.…”

“…Thus, the median duration of cultural homelessness is approximately four months, while the median spell of literal homelessness is around two months. In comparison, the median shelter homeless spell in New York City and Philadelphia is under a month (Culhane & Kuhn 1998;O'Flaherty 2012). Less than ten percent of literal homeless spells last more than 12 month while about 20 percent of cultural homeless spells are longer than 12 months.…”

“…2 See also O'Flaherty (2012) who models the effect of housing policy on entry and exit into homelessness. 3 For example, Allgood and Warren (2003) analyze data from the National Survey of Homelessness Assistance Providers and Clients (NSHAPC) and conclude that homeless spell length varies with individuals' characteristics and previous behavior.…”

Residential patterns in older homeless adults: Results of a cluster analysis

“…The lived environment plays a significant role in defining the experience of homelessness and homeless survival (Marr et al, 2009; Wolch et al, 1988). These environments may result in different patterns of exposure to environmental risks and access to health and social services, yet little is known about where people experiencing homelessness reside and whether there are differences in the characteristics of people who live in different environments (O'Flaherty, 2012). …”

Homelessness prevention in New York City: On average, it works

“…See O'Flaherty (2009, 2012) for a detailed discussion. Overcrowding, eviction and domestic violence are the major reasons why families are determined eligible for shelter.…”