The economic and social consequences of housing tenure

Felici, Marco 

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This thesis explores the consequences of housing tenure in three separate yet interlinked domains that entail economic and social dimensions: portfolio choice, mental health, and voting behaviour. It does so by crystallising the fundamental features of housing tenure and by characterising conceptually tenure transitions as salient events, drawing tight links to recent advances in the statistics of event studies. Crucially, an individual’s housing tenure stems from an endogenous decision that makes it hard to disentangle causal effects. I approach such an identification problem by leveraging insights in housing theory from different disciplines, in combination with the bleeding edge of the realm of statistics that focuses on events affecting different groups at different points in time. I argue that housing, because of its dual nature as both a weighty consumption good and a large asset in portfolios, can be seen as the connecting point between seemingly disparate areas of the lived experience of individuals and households. While housing tenure can take many forms, I focus mostly on a tripartite categorization in renting, mortgaged homeownership, and outright homeownership. Consequently, the events of interest are two: the transition from renting to mortgaged homeownership and the transition from mortgaged homeownership to outright homeownership. Using large surveys from the United Kingdom, I find both transitions to have consequences but, in fact, the transition to outright homeownership to be more conspicuous. Such findings have implications for policy: while I do not analyse housing policy changes per se, tracing out the consequences of tenure transitions offers insights on how changes in tenure composition (possibly propelled by policy decisions) may affect aggregate outcomes. The discussion of the fundamental features of housing tenure, as well as of the tenure transition as an event and its statistical implications, constitute the first chapter of the thesis. The remaining chapters delve into the three realms of portfolio choice, mental health, and voting behaviour, delineating the connections between them.

Fuerst, Franz
Event study, Housing, Mental health, Portfolio choice, Voting behaviour
Doctor of Philosophy (PhD)
Awarding Institution
University of Cambridge
Funding from the Cambridge Humanities Research Grant Scheme is gratefully acknowledged for the early phases of work of Chapter 2.