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  4. December 2023
  5. Identifying the Benefits from Homeownership: A Swedish Experiment

Identifying the Benefits from Homeownership: A Swedish Experiment

  • Paolo Sodini
  • Stijn Van Nieuwerburgh
  • Roine Vestman
  • Ulf von Lilienfeld-Toal
American Economic Review
vol. 113, no. 12, December 2023
(pp. 3173-3212)
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Abstract

Homeownership is widely stimulated by policy, yet its economic effects are poorly understood. We exploit quasi-random variation in homeownership generated by privatization decisions of municipally owned buildings and use granular data on demographics, income, housing, financial wealth, and debt that allow us to construct high-quality measures of spending. Homeownership causes wealth accumulation via house price appreciation, increases consumption, and improves consumption smoothing across time and states of the world. It increases mobility for young households, who move up the property ladder, and amplifies wealth accumulation for older households, who take more risk in their financial portfolio.

Citation

Sodini, Paolo, Stijn Van Nieuwerburgh, Roine Vestman, and Ulf von Lilienfeld-Toal. 2023. "Identifying the Benefits from Homeownership: A Swedish Experiment." American Economic Review, 113 (12): 3173-3212. DOI: 10.1257/aer.20171449

Additional Materials

JEL Classification

  • D15 Intertemporal Household Choice; Life Cycle Models and Saving
  • E21 Macroeconomics: Consumption; Saving; Wealth
  • G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
  • R21 Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
  • R31 Housing Supply and Markets
  • R38 Production Analysis and Firm Location: Government Policy