Residential Mobility and Tenure Choice in the Swedish Housing Market

Abstract: This thesis consists of three self-contained essays concerned with the microeconomics of housing.In Essay 1 I examine the determinants of residential mobility among Swedish households within the framework of duration models. The results give support to the widely acknowledged life cycle - housing cycle connection. Demographic factors are important; age, household size, and the stability of household size all influence residential mobility to a great extent. The notion of a housing career is very plausible. The analysis also indicates that economic factors are important. Changes in the economic environment may disrupt the planned housing career. A higher household income tends to shorten stays in a particular dwelling. An increased cost of owning a home reduces the probability that a renter household should move. This might be interpreted as evidence that the planned housing career is disturbed, i.e. the move from renting to owning is postponed for many households.Essay 2 expands on the findings in essay 1 in that the link between the stage in the life cycle and the choice of housing tenure is looked at more closely. The main questions that I address in the second paper are how changing circumstances in the domestic sphere and on the labor market affect transitions between different housing tenures, and thereby also the resulting housing tenure distribution in the economy. On the individual level these factors are found to influence tenure transitions greatly. However, I also find that the resulting long-term distribution of households over housing tenures is little affected by increases or decreases in the arrival rate of these events.In Essay 3 I explore how the pattern of owner occupation has evolved during the period 1970-97, and examine how a few "typical" households have been able to further their housing situation during this period. Results from the study show that the pattern of owner occupancy differs markedly between age cohorts; households today are much more likely to go through a housing career than they were 30 years ago. Moreover, gender effects vanish over time and household composition is not as important for home ownership in the end of the period as in the beginning. Results also show that the negative impact of being foreign born on the probability of owner occupancy has increased since 1970, and that the influences of household income and relative cost of owned housing have become more pronounced over time.