TY  - JOUR
AU  - Banks, James
AU  - Blundell, Richard
AU  - Oldfield, Zoé
AU  - Smith, James P
TI  - House Price Volatility and the Housing Ladder
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 21255
PY  - 2015
Y2  - June 2015
DO  - 10.3386/w21255
UR  - http://www.nber.org/papers/w21255
L1  - http://www.nber.org/papers/w21255.pdf
N1  - Author contact info:
James Banks
Arthur Lewis Building-3.020
School of Social Sciences
The University of Manchester
Manchester M13 9PL
United Kingdom
E-Mail: j.banks@ifs.org.uk

Richard Blundell
University College London
Department of Economics
Gower Street
London
England
E-Mail: r.blundell@ucl.ac.uk

Zoë Oldfield
Institute for Fiscal Studies
7 Ridgemount
London, WC1 7AE  U.K.
E-Mail: zoe_o@ifs.org.uk

James P. Smith
RAND Corporation
1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
Tel: 310-451-6925
E-Mail: jsmith_1776@outlook.com
M1  - published as James Banks, Richard Blundell, Zoë Oldfield, James P. Smith. "House Price Volatility and the Housing Ladder," in David A. Wise, editor, "Insights in the Economics of Aging" University of Chicago Press (2017)

M3  - presented at "Conference on the Economics of Aging", April 30 - May 2, 2015
AB  - This paper investigates the effects of spatial housing price risk on housing choices over the first half of the life-cycle. Housing price risk can be substantial but, unlike other risky assets which people can avoid, most people want to eventually own their home thereby creating an insurance demand early in life. Our contribution focuses on the importance of home ownership as a hedge against future house price risk for individuals that plan to move up the housing ladder. We use a simple theoretical model to show that people living in places with higher housing price risk should own their first home at a younger age, live in larger homes, and be less likely to refinance. These predictions are shown to hold using panel data from the United States and United Kingdom.
ER  -