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Author: Salter, Sean Patrick
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1. Salter, Sean Patrick
A Transition Analysis of Housing Tenure Choice
Ph.D. Dissertation, The University of Alabama, 2001. DAI-A 62/09, p. 3136, Mar 2002
Cohort(s): NLSY79
Publisher: UMI - University Microfilms, Bell and Howell Information and Learning
Keyword(s): Home Ownership; Household Income; Marital Status; Modeling, Fixed Effects; Modeling, Hazard/Event History/Survival/Duration; Modeling, Logit; Welfare

This study focuses on housing tenure choice--the decision to rent or to own. For many Americans, an important element of their financial "coming of age"; is the decision to buy a home. We examine housing choice with a special focus on youths. Because the consumption and investment patterns of today's young people are not yet established, we must garner insight into this group's decision-making through older groups. We employ the National Longitudinal Survey of Youth 1979 cohort in our analysis. Longitudinal data allows us to follow an individual and to trace the impact of life changes such as marriage, as well as financial characteristics, on the decision to own or rent. Using the NLSY79, we follow a panel of youths over a 16-year period during which ownership rises from 19.70% to 55.54%. The first stage of our analysis is an exploratory investigation of the factors that drive housing choices through time, including income and wealth, user cost of housing, and demographic factors. In this investigation, we identify issues pertinent to the tenure decision for those who have transitioned to ownership. In the second stage of the study, we analyze random effects associated with time and some unobservable factors as well as the previously identified fixed effects, allowing more insight than is available from the simpler logit model. The third and final stage in the analysis is the application of survival analysis to our data. The hazard functions associated with survival analysis allow us to estimate the factors that affect a respondent's time to ownership. We find differences in ownership across gender, racial or ethnic, educational, and socioeconomic lines as are indicated by the results from our base models. However, these differences do not associate themselves across factor lines in our interaction models. The one major area in which differences across ethnicity are ubiquitous is family structure. Marital status and number of children seem to help explain botH tenure choice and transition time well. Additionally, we recognize that there are demographic, household, and income-related factors that help predispose certain individuals to ownership or renting.
Bibliography Citation
Salter, Sean Patrick. A Transition Analysis of Housing Tenure Choice. Ph.D. Dissertation, The University of Alabama, 2001. DAI-A 62/09, p. 3136, Mar 2002.