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- Title
Decreasing house prices and householdmobility: An empirical study on loss aversion and negative equity.
- Authors
Steegmans, Joep; Hassink, Wolter
- Abstract
This paper examines the effects of loss aversion and negative equity on household mobility. We stress the importance of studying these mechanisms simultaneously. By making use of a unique administrative data set of Statistics Netherlands, covering the period 2006-- 2011, we estimate the effects of loss aversion and negative equity. The results provide strong evidence for loss aversion, while less evidence is found for a lock-in effect of negative equity. The results indicate that moderately underwater households do have a lower mobility, but heavily underwater households do not. Additional results indicate that the particularly high mobility of heavily underwater households is not default-driven.
- Subjects
NETHERLANDS; LOSS aversion; EQUITY (Real property); HOUSEHOLD moving; RELOCATION; HOUSEHOLDS; ECONOMICS
- Publication
Journal of Regional Science, 2018, Vol 58, Issue 3, p611
- ISSN
0022-4146
- Publication type
Article
- DOI
10.1111/jors.12380