Quantitative Economics: Nov, 2019, Volume 10, Issue 4

The effect of homeownership on the option value of regional migration

Florian Oswald

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 of lifetime consumption on average, and it varies substantially with household type.

Migration housing lifecycle consumption regional shocks J6 R2 R23

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