Housing wealth accumulation: The role of public housing

Florence Goffette-Nagot (1) , Modibo Sidibé (2)

1 GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne
2 Duke University, Department of Economics

The public housing sector provides housing units at below-market rents, potentially allowing its tenants to save for a downpayment more quickly than they would have otherwise. In this paper, we analyze the effect of a spell in public housing on age at first-time homeownership using the French Housing Survey. We use a pseudo-panel approach that takes into account the specificities of the local housing market, to derive individual tenure transitions from multiple cross-sections data, for the period 1979-2006. Using an IV strategy to control for a potential selection into public housing, we jointly estimate public housing tenancy and duration before first-time homeownership, and take into account unobserved heterogeneity. Our results indicate that a spell in public housing increases the hazard to homeownership, supporting the idea that, in France in the study period, the public housing policy provided an important pathway to homeownership

Mots clés: Homeownership; Public housing; Tenure choice; Duration model; Unobserved heterogeneity

Domaines: Economies et finances

Florence Goffette-Nagot, Modibo Sidibé. Housing wealth accumulation: The role of public housing. Regional Science and Urban Economics, 2016, 57, pp.12-22. ⟨10.1016/j.regsciurbeco.2015.11.004⟩. ⟨halshs-01266386⟩