Tenure choice and expected mobility: A synthesis

New Evidence of the Effect of Transaction Costs on Residential Mobility*

“…The estimates are plausible in the light of international aggregate data on residential mobility and transaction costs (see Appendix 1). 16 The results from specification 1 suggest that transaction costs have a stronger negative effect on moves to renting than to ownership (in line with theoretical and empirical studies such as Boehm, 1981, Rosenthal, 1988Haurin and Grill, 2002). Nevertheless, the null-hypothesis that the effects on moves to renting and on moves to ownership are of equal size cannot be rejected (the mean difference is equal to 3.90% with a standard error of 2.48% according to the loglinear specification; given the linear specification the effect of transaction costs on moves to renting is not identified, so we cannot test the hypothesis).…”

“…Nevertheless, the null-hypothesis that the effects on moves to renting and on moves to ownership are of equal size cannot be rejected (the mean difference is equal to 3.90% with a standard error of 2.48% according to the loglinear specification; given the linear specification the effect of transaction costs on moves to renting is not identified, so we cannot test the hypothesis). This result is seemingly in contrast to the studies by Boehm (1981), Rosenthal (1988 and Haurin and Grill (2002). Note however that these studies are based on mobility behavior in the United States, where renters are four times more likely to move than owners.…”

“…Haurin and Grill, 2002), because an increase in moving costs may be positively related to an increase in future moving costs which decreases expected residential mobility. A decrease in expected residential mobility makes owning relatively more attractive (Boehm, 1981). For the Netherlands, this assumption is thought to be more accurate because the difference in residential mobility rates of owners and renters is much smaller in the Netherlands than in the United States.…”

Intra-urban residential mobility and tenure choice. A case of medium scale town of Thailand.

“…In mobility studies, tenure influences the mobility through the fixed cost of housing (i.e., transaction cost of selling a house) . In tenure studies, the impact of variables in current tenure choice yields an anticipation of future mobility decision (Boehm 1981) . Shelton (1968) explained the tenure alternatives through the expected length of time the household will stay in a given location.…”

Short-Term Buyers and Housing Market Dynamics

“…In their deterministic model, investors with longer holding periods will be selected into the crosssection of assets with higher transaction costs, since they are able to amortize the (high) transaction costs over a longer period. Similarly in the housing literature, Shelton (1968) and later Boehm (1981) indicate that, given large transaction costs, the tenure choice (and thus demand for housing) depends on future expected mobility. Haurin and Gill (2002) utilize a unique data set that can readily identify expected duration, and confirm that the longer the household's expected duration, the greater the likelihood of home ownership.…”