Sharing the Risk of Home-ownership: A Portfolio Approach.

This paper examines the relationships among the desirability of home-ownership, price risks and the return of housing investment. It argues that price risks may undermine the desirability of ownership, using both a theoretical and an empirical approach. The theoretical model studies aspatially the e...

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Publicado en:Urban Studies (Routledge) Vol. 39; no. 7; pp. 1095 - 1113
Autor principal: Mok, Diana
Formato: Artículo
Publicado: Taylor & Francis Ltd Jun2002
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Acceso en línea:Ver este registro en EBSCOhost
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        au: Mok, Diana
      su:
        Home ownership
        Real estate investment
        Portfolio management (Investments)
        Home prices
      sug:
        subj:
          Home ownership
          Real estate investment
          Portfolio management (Investments)
          Home prices
      ab: This paper examines the relationships among the desirability of home-ownership, price risks and the return of housing investment. It argues that price risks may undermine the desirability of ownership, using both a theoretical and an empirical approach. The theoretical model studies aspatially the equilibrium house prices in a two-good, pure exchange economy, where investors (consumers) differ in their level of risk aversion. It shows that larger price risks and higher level of risk aversion decrease the attractiveness of owning a house. The empirical component uses current status data and a proportional hazard model to show the effect of risks and returns on households' hazard rates to be owners. The implication points to the inadequacy of the conventional housing finance arrangements, which provide little help for households to diversify or hedge the risk of home-ownership.
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    language: English
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