Income variability, uncertainty and housing tenure choice

Abstract

Prior theoretical and empirical studies, generally suggest that individuals facing greater uncertainty are less likely to own their home. However, Fu (1995) [Fu, Y., 1995. Uncertainty, liquidity, and housing choices. Regional Science and Urban Economics 25, 223-236] finds the theoretical relationship between uncertainty and housing choices is ambiguous. This paper employs several measures of uncertainty to reexamine the empirical relationship between uncertainty and housing tenure. Results indicate that income uncertainty reduces the likelihood of individuals owning homes at a point in time. (C) 1999 Elsevier Science B.V. All rights reserved.