Open Collections

UBC Theses and Dissertations

UBC Theses Logo

UBC Theses and Dissertations

Urban housing tenure choice from an economic and demographic perspective Lemieux, William J. 1985

Your browser doesn't seem to have a PDF viewer, please download the PDF to view this item.

Item Metadata

Download

Media
831-UBC_1985_A4_6 L44.pdf [ 7.98MB ]
Metadata
JSON: 831-1.0095934.json
JSON-LD: 831-1.0095934-ld.json
RDF/XML (Pretty): 831-1.0095934-rdf.xml
RDF/JSON: 831-1.0095934-rdf.json
Turtle: 831-1.0095934-turtle.txt
N-Triples: 831-1.0095934-rdf-ntriples.txt
Original Record: 831-1.0095934-source.json
Full Text
831-1.0095934-fulltext.txt
Citation
831-1.0095934.ris

Full Text

URBAN HOUSING TENURE CHOICE FROM AN ECONOMIC AND DEMOGRAPHIC PERSPECTIVE  fay WILLIAM J . LEMIEUX, HON. B.A., M.B.A. A THESIS SUBMITTED I N PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE (BUS. ADMIN.)  in THE FACULTY OF GRADUATE STUDIES Faculty;  Q  f Commerce a n d B u s i n e s s  Administration  Urban Land Economics D i v i s i o n  We a c c e p t t h i s t h e s i s a s c o n f o r m i n g to the required  standard  THE UNIVERSITY OF B R I T I S H COLUMBIA A u g u s t 1985 ©  WILLIAM J . LEMIEUX, Hon. B.A., M.B.A., 1985  In. p r e s e n t i n g  this  requirements  thesis  in  f o r an advanced  Columbia, I agree that  freely  available  that  permission  scholarly Department  or  understood  that  financial  gain  by  may his  be or  copying  shall  the  reference  f o r extensive  purposes  not  fulfilment  Library  and study. of  this  granted  by  the  Head  or publication allowed  without  Division  The U n i v e r s i t y o f B r i t i s h 2075 Wesbrook P l a c e Vancouver, Canada V 6 T 1W5  Date: August  1985  Columbia  of I t  of t h i s  of i t  agree  thesis  representatives.  o f Commerce a n d B u s i n e s s  Urban Land Economics  the  make  I further  copying  her  be  shall  for my i s  thesis for my  permission. .  Department  of  d e g r e e a t t h e The U n i v e r s i t y  British  for  partial  Administration  written  ABSTRACT This cycle  thesis  stages  importance through The of  evaluates  as a factor  of tenure  the greater  purpose  In  their  this  model  i s used  allowances The impact their  just  so t h a t  A joint  policy  f o r ownership Within  indicate  impact  mobility i s strong  probability differences the study  this  through  various  life  are estimated  housing  consumption  households a t d i f f e r e n t  cycle  stages  outside of  that  the effect of a n d weak  as households  a r e found  and m o b i l i t y  family life  through  utility  cycle stages.  i i  movers.  occurs  through  to shift  they  framework  ( o r h o l d i n g p e r i o d ) . The  suggests  f o r ownership tend  a r e used t o  and m o b i l i t y  family l i f e  choice, and that  on e x p e c t e d  choice  and non-recent  that  using  head's between t h e  r e a c t i o n s t o income and w e a l t h ,  elasticities  models.  a r e more e f f e c t i v e i n  c y c l e stages  tenure  cycle stages.  results  preferences  recognized  a n d demand  planners,  with  family life  group membership. T h i s  different  market  f o rhouseholds  to test  cycle stage  progress  more w i d e l y  an e m p i r i c a l a n a l y s i s i s p e r f o r m e d  data  on t e n u r e  household  c h o i c e . The  i s t o c o n t r i b u t e t o the knowledge  a r e made f o r r e c e n t  impact  tenure  life  goals.  households.  among t h e l i f e  life  thesis  o f 25 a n d 4 4 . E i g h t  classify  i s being  market p a r t i c i p a n t s  study  urban Canadian age  choice  decision process  makers, and other achieving  of r e s i d e n t i a l  use of housing  of this  the tenure  the influence of family  When  to reflect the decisions of  cycle stages.  This  also  supports  the  concept  of  a  changing  utility  preference  function. In  general  affected  by  consumption  from d i f f e r e n t research with  t h i s study  family  studies,  life  expected  cycle  mobility.  and  life  stages  that  mobility cycle  government  r e s i d e n t i a l tenure  family  finds  and  choice and  choice  influences  stage  demands.  business  are  the  tenure  of  to  result  Further  policies,  encouraged  impact  that  is  dealing  recognize  household  ACKNOWLEDGEMENT I to Dr.  would  like  t h e members Dennis  process  t o e x p r e s s my s i n c e r e  o f my t h e s i s  Cappozza,  committee,  constant feedback,  helpful  i n structuring  Sincere Mortgage  instrumental Finally, Urban  Land  like  Economics  occasionally  and guidance  i salso  extended  C o r p o r a t i o n whose  i n allowing  I would  comments  Jones,  my r e s e a r c h  and suggestions was  particularly  the research study.  appreciation  and Housing  and thanks  Dr. Lawrence  a n d D r . T a e Oum. T h r o u g h o u t  were p r o v i d e d . T h i s a s s i s t a n c e helpful  gratitude  this  financial  s u p p o r t was  s t u d y t o be u n d e r t a k e n .  t o thank Division  t o Canada  t h e other-members of t h e whose a s s i s t a n c e  required.  iv  was  Table 1.  of  Contents  INTRODUCTION 1.0.1  1  MOBILITY,  HOLDING  PERIOD,  STAGES 1.0.2  THESIS  1.0.3  STUDY  2.  LITERATURE  3.  DATA  CYCLE  .  2  REPORT O U T L I N E  4  LIMITAIONS  5  REVIEW  7  AND V A R I A B L E  IDENTIFICATION  21  3.1  INTRODUCTION  21  3.2  SURVEY  22  3.3  SAMPLING  INFORMATION  3.4  VARIABLE  FORMULATION  3.5 4.  BASE  AND L I F E  PROCEDURE  3.4.1  Directly  3.4.2  Number  3.4.3  The E x i s t e n c e Members  Children of  Variables  26  . . .,  26  Non-Nuclear  Family 27  3.4.4  Education  3.4.5  Union  3.4.6  Working  3.4.7  Income  30  3.4.8  Wealth  32  3.4.9  Move  33  3.4.10  Tenure  3.4.11  Length  3.4.12  Life  Cycle  SAMPLE  SIZE  LIMITATIONS  38  AND H Y P O T H E S I S  41  MODEL THEORY 4.1  26  Available  of  23  t  Level  28  Membership of Status  of  the  the  Household  Spouse  Expectancy  Head  ...29 30  35 of  current Stages  MODEL BACKGROUND  marital  status  35 36  41  v  4.2  MODEL THEORY  4.3  TENURE C H O I C E , ATTRIBUTES  4.4  4.4.1  L I F E CYCLE STAGE MODEL I N T E R C E P T T E S T 1; STAGES  TENURE  ON T H E  TENURE 51  INTERCEPT  AND L I F E  CYCLE  COEFFICIENT 58  IMPACTS  OF  LIFE 59  METHODOLOGY  62  5.2  EMPIRICAL  5.3  RECENT  5.4  MODEL S T R U C T U R E  5.5  SYSTEM STRUCTURE  5.6  THE  5.7  R E C E N T AND N O N - R E C E N T S T A G E MODEL  SIMULTANEOUS  TENURE  SUPPORT  VERSES NON-RECENT  THREE THE  MODEL  62  SIMULTANEOUS  APPROACH  MOVERS  66 67  PROBABILITY  MODEL  MOVER A N A L Y S I S  69 IN  A TWO 71  S T A G E MODEL  OF  STATISTICAL  6.1  TWO S T A G E L O G I T  76 ANALYSIS  78  MODEL  78  , MODEL D E V E L O P M E N T  6.1.2  TESTING  6.1.3  THE  THE  MOVER  IMPORTANCE  6.1.3.1  6.1.3.2  .63 64  APPROACHES  TWO S T A G E L O G I T  6.1.1  CHOICE  FOR T H E  RESULTS THE  IMPACT  T E S T I N G FOR C O E F F I C I E N T CYCLE STAGES  THE  THE  50  .54  5.1  5.8  HOUSEHOLD  ANALYSIS  T E S T 2 ; INDEPENDENT V A R I A B L E CHANGE BY L I F E C Y C L E GROUP  4.4.4  MODELING  AND  45  REGRESSION  4.4.3  ' 6.  EXPECTED MOBILITY  U S E OF  4.4.2  5.  43  OF  78 TYPE  IMPACT  81  LIFE  CYCLES  83  T E S T A : I N T E R C E P T AND S L O P E I M P A C T OF L I F E C Y C L E S T A G E  83  T E S T B: L I F E C Y C L E STAGE ON T H E T E N U R E I N T E R C E P T  87  vi  IMPACT  6.1.3.3  6.2  THE  T E S T C : L I F E C Y C L E S T A G E IMPACT ON WEALTH AND INCOME S L O P E C O E F F I C I E N T S IN T H E T E N U R E EQUATION  THREE STAGE LINEAR  6.2.1  MODEL  91  L I F E C Y C L E S T A G E S AND T H E T E N U R E D E C I S I O N I N THE T H R E E S T A G E MODEL  94  6.2.1.1  T E S T A : L I F E C Y C L E STAGE IMPACT ON T H E T E N U R E I N T E R C E P T , WEALTH AND INCOME S L O P E , C O E F F I C I E N T S ..94  6.2.1.2  T E S T B: L I F E C Y C L E STAGE I M P A C T S ON T H E T E N U R E E Q U A T I O N INTERCEPT  6.2.1.3  6.2.2  PROBABILITY  88  T E S T C : L I F E C Y C L E I M P A C T S ON WEALTH AND INCOME S L O P E C O E F F I C I E N T S IN THE TENURE EQUATION  ANALYTICAL  CONCLUSIONS  99  100 102  6.2.2.1  INCOME AND WEALTH E L A S T I C I T I E S  6.2.2.2  CONCLUDING  NOTE  .103 112  BIBLIOGRAPHY  113  APPENDIX  116  6.1  EXTENDED LITERATURE 6.1.1  REVIEW  ECONOMIC CHOICE  STUDIES  6.1.1.1  INTRODUCTION  6.1.1.2  T H E ECONOMICS PERIOD  116  R E L A T E D TO  TENURE 116 116  OF T H E  HOLDING 116  6.1.1.3  DEMOGRAPHICS AND T E N U R E C H O I C E  6.1.1.4  THE AND  6.1.1.5  6.1.1.6  ECONOMIC L I F E CONSUMPTION  .119  C Y C L E CONCEPT 122  HOMEOWNERSHIP OVER T H E HOUSEHOLD L I F E C Y C L E  125  T H E J O I N T N A T U R E OF HOUSING CONSUMPTION AND I N V E S T M E N T  126  6.1.1.7  6.1.1.8  6.1.2  THE 133  THE BOSSONS MODEL: COMBINING THE CONSUMPTION INVESTMENT DECISION  ECONOMIC-DEMOGRAPHIC OF OWNERSHIP  LIFE  CYCLE  AND 136  STUDIES 140  6.1.2.1  INTRODUCTION  6.1.2.2  HOUSEHOLD A T T R I B U T E S HOUSING DEMAND  AND  INCOME AND OWNERSHIP FOR HOUSEHOLD T Y P E S  ALLOWING  6.1.2.3  6.1.2.4  6.1.2.5  6.1.3  CONSUMPTION A S P E C T S OF INVESTMENT DECISION  DEMOGRAPHIC OWNERSHIP  140 RENTAL 142  147  INFLUENCES  ON 150  I N C O M E , WEALTH AND H O U S I N G CONSUMPTION OVER THE L I F E C Y C L E  DEMOGRAPHIC S T U D I E S T E N U R E IMPACTS  OF M O B I L I T Y ,  6.1.3.1  LIFE  S T A G E S AND M O B I L I T Y  6.1.3.2  DIFFERENCES  CYCLE  152  AND 158 .158  BETWEEN M I G R A T I O N  AND M O B I L I T Y  1 62  6.1.3.3  MOBILITY  163  6.1.3.4  PRIOR T E N U R E C H O I C E MOBILITY  6.1.3.5  AGE AND Y E A R S MARRIED S E P A R A B I L I T Y FROM L I F E STAGES  6.1.3.6  6.1.3.7  6.1.3.8  6.1.3.9  AND AGE AND  166 CYCLE  L I F E CYCLE OWNERSHIP  S T A G E S AND HOME  L I F E CYCLE RESOURCES  S T A G E AND  HOUSING TENURE MOBILITY  viii  167  168  STRUCTURE  FINANCIAL 172  IMPACTS  ON 174  AND TENURE '  176  6.1.3.10 THE MCCARTHY L I F E CYCLE STAGE AND TENURE CHOICE MODEL 6.1.4  178  INTERDEPENDENCE ON THE TENURE CHOICE AND MOBILITY DECISION 180 6.1.4.1  INTRODUCTION  180  6.1.4.2  MOBILITY,LIFE CYCLE STAGE AND HOUSING ADJUSTMENT  180  6.1.4.3  THE JOINT DECISION OF TENURE AND MOBILITY  1 86  6.1.4.4  CAUSALITY OF TENURE MOBILITY  187  ix  AND  1  Chapter  INTRODUCTION Every will  family  have  head, a t l e a s t  t o make a d e c i s i o n  of t h e i r  understanding  o f how h o u s e h o l d s  choose  between  t h e r e n t o r own d e c i s i o n  direct  their  efforts  f o r housing  makers, and market  towards  satisfying  efficiently.  I t i s the purpose  of t h i s  test  of housing  choice  of  a model  v a r i o u s economic  properly It the  i s felt  household  that  i n the housing  family  between  life  the family  influences.  economic The mobility influence  first  cycle  life  thesis  to  needs  to develop  so t h a t t h e  determinates  market  and  importance  c a n be  tenure  decision  cycle  tenure  because  within  i s that  are relevant decision  a s how  and  i s p l a c e d on t h e  c o n t e x t . The h y p o t h e s i s  They a r e i m p o r t a n t  stages  making  of t h e i r  impact  on  the household  reacts to  stages  expected  influences. argument  that l i f e  i s one i n f l u e n c e i s that these  cycle  on t e n u r e  stages  t o income and w e a l t h  relationship  expected  various  t h e demand f o r h o u s i n g  the h o l d i n g p e r i o d as w e l l  reaction  will  participants  evaluates e x p e c t a t i o n s of m o b i l i t y ,  c o n s i d e r a t i o n s . Emphasis  relationship  in  and demographic  services  assessed.  pecuniary  the  tenure  lifetime, housing  A better  planners, policy  in their choice of  tenure.  allow  once  affect  choice, the  affect changes.  the  second  households  To u n d e r s t a n d  the  one h a s t o r e c o g n i z e t h e i m p o r t a n c e  holding period i n the tenure  1  decision.  The  of  housing  2  holding  period  household  stages  affect hold  on  life are  the  the  unit  i t does  second  shifts  from  period.  during so  one  housing  Generally  any  life  when t h e r e  suited  Often  since  i s also  an  a household  is a  stage,  shift  the  to i t s  needs and  cycle  tenure  determinants  argued  that  studies  of  life  the  tenure  1.0.1  major  way If  stage  affect  importance  will  change  will  and  from  i f a  one  by  household  stage  urban the  one  utility  to another.  If  the d e s i r a b i l i t y  of  income and  life  s t a g e s , commonly  and  explain  cycle used  of  wealth  stage. in  as  It is  demographic  studies  of  consumption,  importance  of  income and  can  be  wealth  decision.  demography  factor  mobility then  (1970),  literature  in residential  family  housing  family  'Speare  cycle  the  M O B I L I T Y , H O L D I N G P E R I O D , AND The  from  the  cycle  mobility  to better  life  i s that  influences  homeownership then  in  better  d i f f e r e n t lengths there  proposition  socio-demographic  used  affect  mobility.  next.  The curve  of  household  housing  cycles  holding  a housing  move o c c u r s to  by  moves t o a c q u i r e  needs. Family these  is affected  life  cycle  services occurs the  at  economic  Chevan  CYCLE  i s i n agreement  mobility stage  are matched these  LIFE  to the up  turning  decision  i s the  of  (1971), McCarthy  with  STAGES that  movement  next.  1  In  housing  points tenure  (1976).  a  for  this needs.  the  choice  will  3  be  made w i t h i n l i f e  likely  that  household the  these  a t t h e time  considered The  economic  lower  choice  form  results  of  the high  in  the longer  costs  from p r o p e r t y  benefits.  This  services choice. decision in  this  and r e s i d e n t i a l 3  which  result  i nthe  However,  2  expensive  appreciation, imputed  have a major  i s discussed  income period  the length of the set of  impact  of the tenure  mobility  lower  rental  holding  Thus,  that  run because  t o be l e s s  f o ra different  The i n t e r d e p e n d e n c e  on  housing tenure  choice  i s supported  by work  f u r t h e r i nthe  review.  (1968),  Pickvance  t h e need  be  factor i n  f o r ownership.  a breakeven  i s required, will  literature  Shelton  generates  until  should  that the  i n the short  t h e two forms of t e n u r e .  area,  will  run ownership proves  c o s t s , and non-taxed  residency,  mobility  i s a primary  operating  between  then  i s i n agreement  transaction costs  because of gains  by t h e .  I t i s generally accepted  i n lower  i s  d e c i s i o n i s made. I f  of tenure  t o the user.  horizons. I t  constraint.  literature  which  time  are estimated  the tenure  p e r i o d of residency  cost  renting  horizons  i s important  a tenure  determining  3  time  holding period  holding  cycle related  (1973,  McFadyen and Hobart 1 9 7 4 ) , Boehm  (1981),  (1977). a n d Krumm  (1984).  4  1.0.2  T H E S I S REPORT O U T L I N E The  literature  development. choice  will  First,  or  wealth,  household working,  reviewed stages  income  stages  with  school,  unmarried.  while  should,  or  that  include;  savings  t h e number o f  each  literature  members  will  series of family  to predict  include;  life  to  cycle  be  life  The  in their and  children, married and c h i l d l e s s ,  normal childless,  with  children  and older  for single  be a d d e d  that  not everyone goes t h r o u g h t h e some  f o r the relevant  remain  single  others although married These d i f f e r e n c e s  life  that cycle  variables  will  generally  entire  remain  be a c c o u n t e d f o r  are associated stage.  stages.  their  will  and  parents  will  cycle,  cycle  identify  mobility.  single, married  married  variables  mobility  decision  Some a l t e r n a t i v e g r o u p s  life  childless.  within  tenure  the  variables  and i n order  of a f a m i l y  older  recognized  through  allow  or permanent),  a relevant  pre-school  children  lives  (nominal  c a n be u s e d  progression  standard  of  research  i n the model. V a r i a b l e s  the demographic  so t h a t  general  is  will  of  and so on.  that  with  aspects  economic  c a n be d e t e r m i n e d ,  married  two a r e a s  members, t h e number o f h o u s e h o l d  factors  in  This  f o r the tenure  Secondly,  age  of which  n o t , be i n c l u d e d  seem r e l e v a n t  covers  the economic  be d i s c u s s e d .  identification should  review  Research include;  with  mobility  suggests  that  a g e , number o f  It  5 years  married,  household  density,  and  number  of  children. The market  proposed  i s based  variables. to  a  model of  on  of  choice  the  i n t h i s model w i l l  may  useful  types  pecuniary  factors.  to  the  affect  the be  as  as  Thus,  intercept  independent useful  well  mobility their  as  cycle  well  as  the  in determining  further  lead  life  These  cycle variables  different  response  stages  variables.  will  between  tenure  housing  demographic  of  determined.  life  economic  and  importance  be  in explaining  household  i n the  various variables  m o d e l . The  stages be  choice  i d e n t i f i a b l e economic  Analysis  tenure  tenure  are  to expected  c o e f f i c i e n t s of  Conclusions  tenure  choice  should modelling  approaches.  1.0.3  STUDY The  those  LIMITAIONS  age  group  between  25  the  selected  and  45.  segment  of  choice.  Here, a great  influencing  factors  services,  Because  of of  utilized yield  has  b a s e was  a  i n the  focus  tenure  selected  on  choice  i s composed  most  interesting  i t comes t o  a f f e c t i n g the  mobility,  study  i s the  d i v e r s i t y of  t h i s d i v e r s i t y as activity  rich  This  p o p u l a t i o n when  housing  levels  f o r the  and  well  housing  t h i s age  types  preferences  for  as  choice  market,  the  should  sectional  offers  high  data  segment. T h i s  that  and  occur.  traditionally  results. A cross  for t h i s study  tenure  household  tenure  of  data  information  6 on  households  and  covering several  demographic  3200 c a s e s  and  aspects  p e r s p e c t i v e . The  raw  i s representative  from  data  o f C a n a d a . The  o n l y w i t h urban  o b s e r v a t i o n s from  household  h e a d age  This  cases  utilized  Institute  of  t o 855.  The  reduces  data  B e h a v i o u r a l and  economic  survey  concerned  group.  an  the  s e t was  covers model  the  25-45  number  compiled  Environmental  is  of by  the  Studies,  York  University. After be  model  s u m m a r i z e d . The  compared  to the  synthesis  of  Given  then  possible  be  strength  of  results.  these to  i s completed  findings  expected  prior  review.  the  testing  will  also  results  as  research cited results  and  the be  results discussed  determined  i n the  evaluations,  the modeling  and  from  the  literature  formulate c o n c l u s i o n s of  the model,  will  approach,  i t will the as  well  as  Chapter LITERATURE Chosing a  reaction  of  study  in  various  sciences  t o maximize  benefits  sciences.  their  o f human  Economics concerned  satisfaction  i s that  a l l consumers  constraining  outcomes of these  models w i l l  be c o n s i s t e n t  only  can account  f o r changes  of consumers.  o f t h e model  This  study  from  follows  t o maximize u t i l i t y ,  between  This  tenure  associated McFayden different  with  choice  the basic and t h a t  and the cost  various  and Hobart  reality  with  i n the  holding  (1979) have  circumstances  that  underlying  when a l l  remaining  that  periods.  chance.  households  i s a relationship  of housing  services  Shelton  shown under  the holding  7  reality  i s due t o random  there  This  reactions  occurs  premise  have  v a r i a b l e s . The  i n d i c a t o r s a r e i n t h e model and any  variation  act  curves.  of behavioral  of economic  relevant  consumers  to prices. A  a n d t h u s common u t i l i t y  structure  with  by t r a d i n g o f f  on a number  preference  behaviour  i s one a r e a o f  p r i n c i p l e that  one t o b u i l d a macro model  i f t h e model  areas  are generally  ( o r q u a n t i t i e s consumed) r e l a t i v e  preferences  Many  behaviour.  the basic  common s i m p l i f y i n g a s s u m p t i o n  based  areas  and i s g e n e r a l l y  follows  market i s  circumstances.  to the understanding  a f f e c t s and e f f e c t s of  Economics  allows  i n t h e urban housing  t o a s e t of surrounding  t o as the s o c i a l  pecuniary  similar  REVIEW  environments and these  social  behave  of tenure  are devoted  referred the  a form  2  (1969), and  a number o f  period  i s critical  8  in  determining the  which  Due  to  the  p r e f e r r e d form of  suggests  high  form  the  tenure  p l a y s an  services  with  relative  to  costs  three  changes  moving.  At  This  higher  i f the  exemption  personal  on  imputed  wealth  investment  alternatives from  the  services.  capitalizing  addition plays  a  Job  housing  of  market.  housing change  income  or  transfers will  time  for both  very to  role  levels  through  long The  moving,  lead  such  as  c o s t s , outweigh i n t r a - u r b a n as  a  in  the  well  as  advantage  important. the  tenure  are  sought elastic  tax  capital  out.  benefits.  i n o b t a i n i n g market  This  nature  supply  tax  to  the  gains  i t i s often desirable to  highly correlated with the  of  Due  home o w n e r s h i p b e f o r e  elastic  determining  role  tax  more  housing,  run  excess  the  r e n t s , and  use  accumulate  be  greatly  requirements  b e n e f i t s of  increasingly  of  should  i n the  location,  travel  exists  income  non-taxation  housing  Housing  implications also play  o w n e r s h i p becomes  obtained  This  situations.  Taxation choice.  holding periods.  adjustment  preferences.  t r a n s p o r t a t i o n and  of  renting is  expected) w i l l  role  i n f l u e n c e s ; job  household  inter-urban  of  f o r the  requirements.  residential  reduced  efficient.  ownership,  for short  important  i s a mechanism  to  of  ( d e s i r e d or  Mobility  and  i s more c o s t  tenure d e c i s i o n .  Mobility  wealth,  tenure  transactions costs  that mobility  influence  of  other  result  is  of  the  supply  negates  the  possibility  Therefore, ownership.  savings  from  of  wealth Income,  imputed  in  rent,  financing. Additionally  9 housing asset  is a  lumpy a s s e t  value,  likely  an  exist.  ownership  to  income  with  a  relatively  threshold  This  suggests  that  income  i s not  linear  high  e f f e c t on the  personal  ownership  will  r e l a t i o n s h i p of  and  follows  a probability  funct ion. The period  above  costs  choice.  In  information  has  addition  important.  Age  framework  been u s e d  preference  taxation  i n user  cost  models  such  specific  seem t o  occupation,  o w n e r s h i p and  size,  of  and  of car  gross  This  approach  user  cost  the  uses  income, age,  Constructs  p o s i t i o n , s t a t u s , and  tenure are  a  and  ownership as  classified  holding  Rosen."  curves (1972)  constructs.  ownership.  of  within  J a f f e e and  Dooling  factor analysis are  advantages  rates  affect utility  utility  general/financial  by  information  family  and  f a c t o r s demographics  ownership  for ownership.  socio-demographic  argument  with  have been d e v e l o p e d  Demographics  through  to  dealing  as  head's  predictors were  of  identified  perceived  independent follows  Dooling's  that  "because of d u r a b i l i t y and c o m p l e x i t y as a m u l t i d i m e n t i o n a l c o m m o d i t y , h o u s i n g and tenure choice r e q u i r e s a r i c h e r a n a l y s i s than the t r a d i t i o n a l form of e c o n o m i c a n a l y s i s . " Dooling  achieves  good  predict  36  buyers and  those  "See  who  of  39  were o f f e r e d  Hendershot  1954-1979,  and  p.119.  results with  the  22  of  option  Shilling,  The  h i s model. 24  He  continuing  to purchase  Economics  of  i s able renters  their  to of  rented  Tenure  Choice  10 houses at was  market  p r i c e s . An  o v e r a l l R-squared  value  of  50%  achieved. The  economic  savings model  also  the  lifetime  life  offers  utility subject  Modigliani  and  model of  consumption,  i n s i g h t s into tenure  of to  cycle  consumption a wealth  choice.  i s maximized  and  In  over  this one's  c o n s t r a i n t . According  to  Brumberg  "an i n d i v i d u a l s r a t e o f c o n s u m p t i o n a n d s a v i n g s can be e x p l a i n e d n o t by t h e i n d i v i d u a l s c u r r e n t r a t e o f i n c o m e , b u t by t h e i n d i v i d u a l ' s c u r r e n t p o s i t i o n d e s c r i b e d by age and p r e s e n t w e a l t h - i n t h e life cycle ." 5  Yarri and  proves  continuous  earlier and of  that  the  function  conclusion  lending  optimal of  that  (saving  the  consumption  and  market  and  the  result  assumes a  consumption First,  depend  perfect  time.  market  rate  of  this  market  be  affected  for borrowing  by and  i m p l i c a t i o n s e x i s t ? Tobin  S e e A r t i e and V a r a i y a , Homeownership" p.38  "Life  Cycle  the  be  lending  individual's subjective  could  finds  interest.  the  and  now  He  between  for borrowing, can  i t s rate  Tobin  7  profile.  difference  borrowing  t o make  what d e t e r m i n e s  what  ibid.  over  in  questions  perfect  7  in order  consumption the  engage  smooth  Fisher's  Two  i f the  ibid.  on  is a  highlights  will  individuals subjective  over  Second,  6  the  uniform  plan  time.  interest,  5  This  6  dissaving)  shape of  rates  time.  a household  c o n s u m p t i o n more n e a r l y  determines  consumption  This and  raised. rate  of  socio-demographics? lending  is  c o m m e n t s on  Consumption  and  not the  11  second q u e s t i o n constrained Artie  and  ownership,  may  the  and  and by  their  c o n s t r a i n t s and of  find  against  housing  user  weighed against reduction  of  the  homeownership  the  market  the  and  result also  available  are  age.  However  the  appears  shape to  investment  ibid.  be  of a  the  status  strong  in housing.  by  flow  life  Varaiya  and  profile.  the  benefit must  of be  the  c y c l e . In  of  this  difference  of  what a f f e c t s  mention  stage  i n the by  no  that a l l  relationship life  cycle.  household  head's  f a c t o r s may  cycle consumption  Bossons  in  inability  cost,  the  strong  measured  relation  This  distortion  Thus the  question  show a  the  interest rates.  socio-demographic life  consumption  interest rate. Although  position i s often other  imperfections.  a f f e c t e d by  and  of  housing  r e s u l t i n g from  i n the  r a i s e s the  studies  between homeownership cycle  utility  timing  i s s e n s i t i v e to  caused  cash  subjective  made A r t i e  empirical  Life  high  early  individuals subjective  suggestions  8  but  8  the  i s a major  equity.  is directly  personal  cycle  profile  l o s s of  consumption  way  This  cost,  market  there  accumulating  liquidity  s u c h as  nature,  life  that  that  durables  other  the  and  differently.  (1978) suggest  indivisible  shape  wealth  react  homeowner's c o n s u m p t i o n  lower  that  d i s p o s i t i o n of  Varaiya  to borrow  in  will  Varaiya  a f f e c t the  Artie  suggests  households  acquisition  liquidity  and  play  function.  between consumption (1978) s u p p o r t s  a  a  role  There and  strong  12 application market  of t h e economic  imperfections  aspects  a s p e c t s a r e added  ownership.  (or  model,  b u t due t o  the investment and  a s s u g g e s t e d by t h e e c o n o m i c  Consumption  of  he f e e l s  cycle  consumption  o f home o w n e r s h i p a r e n o t s e p a r a t e . W e a l t h i s  emphasized  and  life  Consumption  relative  prices  consumption interest)  consumption  cycle  i s a result  f o r goods.  of u t i l i t y preferences  A s was m e n t i o n e d  also  affect  above  subjective  I f household demographics  then they w i l l  model.  as other determinants of  a r e d e t e r m i n e d by one's rate.  life  rates  discount  affect  homeownership.  This  results  because  of t h e n o n - p e r f e c t n a t u r e of t h e h o u s i n g and  related  capital  lending  jointness  markets.  of housing consumption  s o c i o - d e m o g r a p h i c s c a n be u s e d  Thus,  to explain  t h e same w e a l t h c h a r a c t e r i s t i c s  choice  o f t e n u r e . Demand that  services.  Based  on t h i s  why  differ  f o r ownership w i l l  are proxies  f o r t h e demand  Bossons  of the  and investment,  having  variables  because  (1978:91)  two  households  in their  depend  on  f o r housing notes  " i t i s n e c e s s a r y t o model i n t e r - h o u s e h o l d d i f f e r e n c e s i n t h e d e m a n d f o r h o u s i n g i n a way t h a t c a p t u r e s b o t h v a r i a t i o n s i n t h e demand f o r consumption of housing s e r v i c e s and v a r i a t i o n s i n the demand f o r p r i n c i p a l r e s i d e n c e a s an a s s e t . " The the  relationship  alteration  profile  due  result  less  lifetime  through p o r t f o l i o  because  to indivisibilities,  services,  demographics,  of the households  c a n be s e e n  imbalances  between  than perfect  imbalances.  Such  i s not perfect  heterogeneous  knowledge,  and  consumption  t h e h o u s i n g market durability,  consumption,  housing  and b o r r o w i n g  13 restrictions.  Here,  " w h e t h e r o r n o t a h o u s e h o l d owns i t s r e s i d e n c e w i l l d e p e n d i n p a r t on i t s demand f o r p a r t i c u l a r h o u s i n g c h a r a c t e r i s t i c s t h a t c a n ( o r more e a s i l y ) be o b t a i n e d t h r o u g h home o w n e r s h i p . " Also "other things being equal, the higher the q u a n t i t y o f s e r v i c e s demanded ( f o r example, due t o a l a r g e r f a m i l y ) , t h e more w i l l be t h e p o r t f o l i o i m b a l a n c e t h a t must be a c c e p t e d i n o r d e r t o o b t a i n t h i s q u a n t i t y of h o u s i n g s e r v i c e s i n t h e form of p a r t i c u l a r bundels of housing c h a r a c t e r i s t i c s which are obtainable through ownership ." 9  According demand and  f o r housing  employment  children, and  t o Bossons  strong support  space.  status,  Direct  factors.  and a l i n e a r  support  tests  probability  f o r demographic  effect  this  model.  influences.  impact  due t o c a p i t a l  a similar  when  h o m e o w n e r s h i p by h o u s e h o l d  from  between h o u s e h o l d Households only  9  (1982)  attributes  a r e found  thereafter  Bossons,  a number o f o t h e r  and Whitehead  1978, p.91.  there  was  suggesting a This  (1974,1975)  who  income and  find  approach  studies.  taken  housing  relationship demand.  socio-demographic  influence  further  by  Awan,  a strong  and r e n t a l  to satisfy  d i d income  yield  types.  f o r the socio-demographic  comes  Odling-Smee  evaluating  socio factor  imperfections.  obtain  result  Also,  of wealth  market  using  The r e s u l t s  i s s u p p o r t e d by S t r u y k a n d M a r s h a l l  Bossons  the  marital  and other  approach  result  Support  include  i n the household,  He  f o r the non-linear  threshold  variables  affect  e d u c a t i o n , number a n d age o f  number o f a d u l t s  demographic  analysis  various characteristics  needs and  consumption.  14 Struyk  and M a r s h a l l  head's age and m a r i t a l different type.  ownership  Results also  the p r o b a b i l i t y including were  ownership most  status.  They  find  income e l a s t i c i t i e s indicate  increments  household  and most e x p l a n a t o r y  substantially  i n the  relevant conclusion to this  Struyk  thesis  between variables,  household,  by h o u s e h o l d  o f income had a p o s i t i v e  but at a decreasing rate.  by  support'for  that the relationship  of ownership  to differ  households  f o r each  income and number o f p e r s o n s  found  example,  (1974-1975) s t r a t i f y  type. For  influence  on  and M a r s h a l l ' s  was  that  "the determinants of household tenure c h o i c e a r e c e r t a i n l y t h e same s e t f o r t h e d e m a n d f o r h o u s i n g s e r v i c e s . Tenure i s a s i n g l e , a l b e i t , very important a s p e c t o f h o u s i n g demand." ( 1 9 7 4 : 2 9 0 ) The and  study  predicting  developments of  human  in this  the family  has  of demographics  life  i s concerned  behaviour. area  cycle  s i n c e become a f r a m e  of r e f e r e n c e  Glick  (1955:164) t h a t emphasizes and a l s o  demand a s w e l l  as  refers  does  introduction  a s an o r g a n i z i n g p r i n c i p l e ,  Sweet  cycle,  explaining  of the major  o f r e s e a r c h was t h e  398).  life  (1977:364)  One  with  (Sweet,  to a "classic the concept  s o by r e l a t i n g  which  1977:365,  article" of the  by family  to i t t o housing  mobility:  "During the l i f e of the t y p i c a l family, important changes occur not o n l y i n the composition but a l s o i n many o t h e r m e a s u r a b l e c h a r a c t e r i s t i c s o f t h e g r o u p . The f a m i l y i s l i k e l y t o move t o o n e o r more new l o c a t i o n s i n t h e p r o c e s s o f a d j u s t i n g t o new h o u s i n g r e q u i r e m e n t s or of i m p r o v i n g employment o p p o r t u n i t i e s . A home may be p u r c h a s e d ; t h e r e n t a l v a l u e o f t h e l i v i n g q u a r t e r s may c h a n g e . T h e p r o b a b i l i t y of employment of t h e husband and h i s w i f e w i l l d i f f e r f r o m one p h a s e o f t h e f a m i l y life cycle t o another."  15 Glick's  classic  article  emphasizes  the family  life  cycle  as  that  this  o  a  framework  approach allow  of a n a l y s i s .  (1977:368) s u g g e s t s  c a n n o t be u n d e r e s t i m a t e d  the assessment  reproductive demand.  Sweet  capacity  o f human  because  resources  i t s dimensions  of a s o c i e t y , i t s  and p o t e n t i a l , as w e l l  as  consumption  1 0  A l s o , "each of t h e major demographic p r o c e s s e s (fertility, m o r t a l i t y , m i g r a t i o n , and n u p t i a l i t y ) t a k e s p l a c e w i t h i n a f a m i l i a l c o n t e x t , and t h e various features of that context a f f e c t the p r o b a b i l i t y of a demographic e v e n t , i t s t i m i n g , and i t s c h a r a c t e r . " ( S w e e t 1977) It  should  be n o t e d  that  age and l i f e  two  different influences  on m o b i l i t y .  not  a l l i n d i v i d u a l s pass  through  those  that  study  found  1920  do u s u a l l y that  experienced  relationship direct  See  cycle  life  1 2  See  life  indicate  David  life  cycle.  1 1  cycle  There  because cycle  One  and  early  women b o r n i n i s likely  a  but i t i s not a  has been  (1982)  find  with  studies  f o r the use of  of housing  marriage-partnering  ( 1 9 6 2 ) , Doge  i n several  residential mobility.  support  i n an a n a l y s i s that  used  (1966),  1 2  family  consumption.  and the  Cutright  initial  (1971),  1976).  Unlenberg  Sweet,  cycle  decade d e a l i n g  stages  also  McCarthy 1 1  the family  57% of M a s s a c h a c h u s e t t s  between age and l i f e  family  the past  Results  1 0  occurs  do so a t d i f f e r e n t r a t e s .  a normal  McLeod and E l l i s life  This  stage are  one.  The over  only  cycle  (1969) as r e f e r e n c e d  1977:369.  i n Speare  (1970:453).  16 schooling  of c h i l d r e n are s i g n i f i c a n t  rearing  process  reduced  space  wealth and  i s completed  consumption.  c o n s t r a i n t s vary  Ellis  there  stages.  the child  i s c l e a r evidence of  I t was a l s o  by f a m i l y  When  life  found  that  income and  cycle  stage.  McLeod  conclude  " t h e f a m i l y l i f e c y c l e s t a g e s c a n be h e l d t o d e f i n e subgroups w i t h r e l a t i v e l y homogeneous h o u s i n g requirements or preferences." Life change of  stages  in a dwelling  area  ratio  cycle  are associated  unit  and d e n s i t y .  i s often  I t appears  e x i s t s f o r each  life  their  density  their  cycle  stage.  relevant The  use of l i f e  economic  cycle  perspective.  individuals utility  life  within  preference  ( 1 9 7 7 : 3 6 5 ) who  similar  A  changes  a r e found  the average f o r  1 3  makes  sense even  i t was s u g g e s t e d  life  cycle  functions. This  i n reference  with  Households  towards  stages  Earlier  needs.  a different density  stage.  t o move t o r e a d j u s t  housing  associated  that  cycle  with  stages  that  have  i s supported  t o Winsborough  from an  by  similar Sweet  (1975:2-4)  notes  that " i n m o d e r n s o c i e t y , o f c o u r s e , many a s p e c t s o f s o c i a l s t r u c t u r e , as w e l l as i n d i v i d u a l e x p e c t a t i o n s , w a n t s , a n d n e e d s , d e p e n d on t h e orderliness of the l i f e c y c l e . Special i n s t i t u t i o n s e x i s t t o 'process' people through various l i f e c y c l e stages." This  idea  within  that  various  demand p r e f e r e n c e s life  McLeod and E l l i s  1 3  See  Chevan  cycle  stages  ( 1 9 8 2 : 1 7 7 ) who  are highly i s the basis note  (1971:457) and McCarthy  (1976).  consistent of a study  by  17  " t h e f a m i l y l i f e c y c l e concept has l o n g r e c e i v e d a t t e n t i o n a s a n i m p o r t a n t i n f l u e n c e on t h e p a t t e r n of h o u s e h o l d c o n s u m p t i o n and e a r n i n g s and an i n f l u e n c e on p r o d u c t m a r k e t i n g . " They a l s o this  note  approach  tenure  that  t h a t t h e r e has in recent  recognition  of  consumption  and  determination.  The  g e n e r a l c o n c l u s i o n of  the  family  life  p r e f e r e n c e s , and  use  little  s t u d i e s of h o u s i n g  cycle  subgroups w i t h r e l a t i v e l y or  been  studies in this  stages  be  1  held to  homogeneous h o u s i n g  that these  i n a n a l y s i n g the  can  area "  housing  subgroups are  consumption  is  define  requirements of  considerable  decision  of  households. Earlier influenced  i t was  by  the  tenure  c h o i c e has  nature  between  by  several  mobility,  discussed that tenure  expected  authors. life  h o l d i n g p e r i o d of  much t o do  tenure  cycle  1 5  choice  with mobility.  c h o i c e and Quigley  mobility  and  s t a g e , and  tenure  r e s i d e n c y . Thus The  has  Weinberg  is  causal  been s t u d i e d  (1977)  c h o i c e by  relate noting  that ; " t h e r e i s s t r o n g r e a s o n t o e x p e c t m o b i l i t y t o be a s s o c i a t e d w i t h any c h a n g e s i n h o u s e h o l d d e m o g r a p h i c s t h a t s h i f t t h e demand f o r h o u s i n g s e r v i c e s " and " h o u s e h o l d s t h a t can p r o j e c t major  1  "McCarthy  (1973-1974), McLeod and 1 5  Pickvance  (1981) and  (1976), Golant Ellis  Chevan  (1970),  (1977),  (1980),  (1973-1974), more r e c e n t l y  Speare  Q u i g l e y and  C l a r k and  Krumm  Weinberg  Onaka  Q u i g l e y and by  (1971),  (1977),  (1983).  Weinberg  (1984).  Pickvance  (1977),  Bohem  18 c h a n g e s i n h o u s i n g d e m a n d , ... d i s c o u n t l o s s e s o v e r a s h o r t e r t i m e . T h i s s u g g e s t s why, f o r e x a m p l e , h o u s e h o l d s t h a t e x p e c t t o move f r e q u e n t l y t y p i c a l l y choose r e n t a l u n i t s . " (1978:58) The  relationship  life  cycle  stages  Pickvance tenure  and  factors  are  i s also  s u p p o r t e d by  mobility  to affect  c a u s a t i o n between to f u l l y  rigorous  decision  has  (1984).  These  demand and  (1973,1975) d e v e l o p s  found  i s unable A  ownership  expected  reciprocal but  of  test  analysis  of  been u n d e r t a k e n studies  show a  both  t e n u r e and  mobility  is  likely  mobility  by  Boehm  (1981)  Krumm  and  strong interdependence and  tenure  both decisions  o t h e r . The  suggest  suggests  t e n u r e and  affect  s t r o n g and  He  joint  factors  quite  joint  the  that  each  a causal  this hypothesis.  expected m o b i l i t y  affect  to  (1955:9).  tests  decisions.  between  decisions  period  Socio-demographic  relationship similar  Rossi  and  model.  holding  and  of  the  choice,  that  these  i n t e r d e p e n d e n c i e s seem  a method of a n a l y s i s  in  this  direction. The towards is  development the  of  interdependence  interesting.  Mobility  demographers. Housing work.  Sweet  studies  1 6  Frey  Speare  several  (1976), Long (1970), Long and  Frey  of  the  studies  t e n u r e was  (1977:369)  notes  Goldstien  research over  the past  tenure/mobility  were  first  and  in this  Glick  of  a natural  i n h i s review of papers  part  family  area.  1 6  decision  interest of  to  such  demography  Further  ( 1 9 7 6 ) , Goodman  (1972), R i t c h e y (1976), (1974).  decade  (1974),  Speare,  19  literature to  guides  Pickvance  family  as  1 8  stage  method  consumption.  A  developed 1 9  Krumm  for  inclusion  found  (1984) and  (1981)  of m i g r a t i o n w i t h tenure  this  variables without  family  life  intergration  family  finds  work  take  indicators, of  the  into  articles  structure  c h o i c e and  Boehm  namely  demographic  cycle  According  1 7  i t s way  (1978) e v a l u a t e s the  with tenure  stages.  life  found.  analysis,  use  demographic  Bossons  factors  of  be  number of  family  other  can  subgrouping,  or  stages.  the  this  research would  the  economic  material  Other  age,  imposing cycle  cycle  housing  approach. such  (1974),  life  d o n e on  to t h i s  life  strong as  a  cycle support  joint  dec i s i o n . Overall, choice  the  literature  is affected  by  variables  including  mobility.  The  family  life  literature, After the  1 7  1  of  "McCarthy  of  used  the  this  Lughod and  Pickvance  family  life  this  s t a g e s , as  be  discussing  nature  Abu  can  suggest  income, w e a l t h ,  purpose  cycle  findings  data  base  i s to test the  explain  the  relationship  Foley  s t a g e s , and  d e f i n e d by  to better  next  and  tenure  socio-demographic  cycle  thesis  that  whether  demographic  tenure  chapter  indicates  (1960:J34-152),  expected  Simons  choice. discusses  the  two  (1968),  (1973). (1976),  Dooling  (1976),  and  McLeod and  Ellis  (1980). 1 9  Struyk  Golant  and  and  (1977).  M a r s h a l l (1974,  1975),  Jones  (1977),  and  of  20  p o s s i b l e .ways t h a t tenure  decision.  life  cycle  stages  can  impact  on  the  Chapter DATA B A S E AND  3.1  o f t h e more d i f f i c u l t  to develop  research  or obtain a data  question  IDENTIFICATION  general. the  This  bases  reviewed  Social  The  only  Social  Change  a number  contains  background  1660  Of  The  t h e 3300  remaining  information  by  on a s s e t s  liability over  m o b i l i t y . Due information  the second  of  was  source  1977, p r e p a r e d  Survey  economic  data  the  i s the by t h e  i s a panel  and  and l i a b i l i t i e s  demographic  i n 1977,  i n 1977  particular  there  interest contained  useful information  to the r e s t r i c t i o n  this  were  was  study  about  the  i n only  of asset  a c r o s s - s e c t i o n a l e v a l u a t i o n of the f i r s t  21  1979, a n d  related  t o 1977 a n d t h e l o s s o f stage,  study  i s s u e s , and  administered  participated  and t h i r d  that  readily  i n meeting  and p o l i t i c a l  respondent  1 9 8 1 . Of  i s often  t h e numerous  This  the  Research a t York U n i v e r s i t y .  of s o c i a l  who  because  i s usually  not  satisfactory  survey  study  t h e common d i f f i c u l t y  requirements.  1977 q u e s t i o n n a i r e . O t h e r expected  of the study  f o r m . Of  i n Canada  survey  occurs  the a v a i l a b l e data  o n e was  i n Canada  covering  1981.  This  convenient  for Behavioural  information.  base.  d e s i r e d v a r i a b l e s were  theoretical  Change  Institute  while  i n t h e most  diversified  of any e m p i r i c a l  t h e s i s encountered  theoretically  available  tasks  and p e r s p e c t i v e  narrow and s p e c i f i c  to  VARIABLE  INTRODUCTION One  is  3  the  to  and  observations  restricts  itself  administration.  22  3.2 SURVEY The  PROCEDURE  survey  i s national  i n s c o p e a n d was u n d e r t a k e n  May t o J u n e  1977. Data  probability  s a m p l e o f 3288 p e r s o n s  older.  Questions  questionnaire concerned  pertaining  were grouped  The next  situation  items  situation.  A total  with at least  situation,  their  of s i x t e e n  dealt  t o grade  income, debts.  spouse  domain  current situation  Individual  items  total Next,  housing.  several  of  their  were with the  different  domains  employment,  family  life  position.  specific  When  questions  membership of the  of  were q u e s t i o n e d  asked. about  satisfaction.  include the level  of personal  savings and investments, and  of questions covered  the area of  with the characteristics  dwelling,  of  (where a p p l i c a b l e ) were  and l e v e l  income,  a series  areas  and f i n a n c i a l  respondents  measured  This dealt  respondents  items  with housing,  s t a t u s and union  and t h e i r  the financial  their  the specifics  one g e n e r a l e v a l u a t i o n of  dwelling unit  w i t h work  respondent  of the  or s a t i s f a c t i o n  e m p l o y m e n t d o m a i n was a d d r e s s e d ,  dealing  In  attributes  items  e d u c a t i o n , and f a m i l y i n f o r m a t i o n .  Respondents were asked  the  of the  i n c l u d e d f o r each.  Domains o f i n t e r e s t  including  nationwide o f age and  i n t h a t d o m a i n . The f i n a l  respondents  financial  18 y e a r s  concerned  of perceived q u a l i t y  satisfaction  a  t o g e t h e r . The i n i t i a l  evaluations  were a s s e s s e d ,  from  t o a g i v e n domain  t h e simple demographic  respondents. current  were c o l l e c t e d  from  of the  p r o p e r t y v a l u e , money o w i n g on  23 mortgages,  costs  residential housing nine  marital  m o b i l i t y , . and The  s c a l e . Other  their  provided  interviewer  by  s e r i e s of  observations.  r e s p o n d e n t s age, household.  sex,  and  Interviewer  respondent's dwelling  SAMPLING Data  obtained  through  Respondents were  Northwest the  with  and  the  information direct  employed  these.  future  the  respondent  supplemented  included  a  current  for  about  the  a  and  for  number o f  questions data  future  education  expectations  ratings included  by  the  head  of  summary o f  the the  neighbourhood.  S o c i a l Change  and  interviews with  18  of  years  Indian  of  the  or  excluded  over  survey 3288  excluded  persons.  living  include were  was  in  the  Yukon  residents  Canada, p u b l i c and  and of  private  reservations. contains  stratified  in proportion These  age  Persons  w h i c h was  Quebec, O n t a r i o ,  i n Canada  personal  regions  survey  regions.  questions  r e l a t i o n s h i p to  sample methodology  representation five  with  u n i t and  Territories.  institutions,  national  expected  also addressed  Personal  i n Canada. A r e a s  far Northern  The  w e l l as  expected  INFORMATION  f o r the  households  was  dealt  background a  as  residence,  satisfaction  demographics,  Finally,  of  domains d e a l t  oriented questions  births.  3.3  current  status. Satisfaction  children,  was  renting, length  satisfaction.  point  Family  of  regions Prairie  two by  parts. First, region  to  the  population  are  the  Maritime  provinces,  and  to  give  i n each provinces,  British  a equal of  24  Columbia.  Second,  an  residents  i n each  of M o n t r e a l  follows of  the  stratification  status  and  and  Also  which  Toronto  life  or  sample  of  primary  Within  a  cycle  sampling  probabilities  totals.  For  (systematic) the  permit  the  household.  design  units  on  Within  each  were E.A.'s  to  their  to t h e i r a  of  list  the  employed  of  to  select  seventy-six  strata  (enumeration  sampled  Census of  the  size,  addresses  sampling  of  the  stage  sampling  f o r each to the  the  to permit  unit; design  random  the  units;  sampled dwelling-address w i t h i n  selection  up  of.its  random  was  at  where  household  permitted the  second-stage  areas).  with  estimated  1971  This  was  units  belonged  at  socio-economic  household  (persons  selection  based  of  individuals,  The  regional  list  m e m b e r s who  sampling  was  procedure  d r a w n up.  Finally,  level  Within  d w e l l i n g s . W i t h i n each a  of  by  stage.  selection  s a m p l e d E.A.,  stratification  project.  s a m p l e E.A.,  then  survey  a d m i n i s t e r e d the  referred  each  The  Centre,  proportional  was  the  s t r a t u m , E.A.'s were  size  dwellings  Toronto.  Research  individuals.  given  estimated  and  c o n s i s t e d of  Survey  the  by  A multi-stage sampling the  which  i n c o r p o r a t e d i s a type  o f t e n used  University,  Montreal  panel  conventional geographic  urbanization.  York  urban  third  sampled  then  household  a  drawn up units; list  18  selection  years of  of  the  age),  was  of i t s  drawn  fourth-stage  individual.  incorporates the  (equal p r o b a b i l i t y  of  principle selection  of  EPSEM  f o r each  to  the  sampled p o p u l a t i o n of  least  a  member)  25 at  the second  subsequently the  sample  selected. person  each  frame,  that every  chance  enumeration occupied  results  stage  of s e l e c t i o n ,  eligible  person  were o b t a i n e d  t h e base from  this  The  sampling  f r a m e was d e s i g n e d  and  Montreal  thus  completion  A detailed in  this  Patel, for  study  reducing  national  rate  were  selected  tables, had an  i n 484  number,  t o 4929. The  4.5% w e r e  following  base:  %  Number 3288 178 811 482 1 20 50  t o over  67 4 16 10 2 1  represent  the completion  sample would  have  rate.  A  Toronto perfectly  produced  a  of 70%. description  c a n be f o u n d  "Sampling  eligible  i n the household  Completed Interviews 111 o r A g e d Refusals Absent Language D i f f i c u l t i e s Other  representative  random  a c r o s s C a n a d a . Of t h i s  reducing  one  of being  selected.  o f 5164 a d d r e s s e s areas  and  t h e same c h a n c e  using predetermined  of being  address,  i n the population included i n  had approximately  In the fourth  A total  not  s t a g e s . Thus each  household  was s e l e c t e d  assuring equal  and t h i r d  of the sampling i n Bryn  the Quality  Behavioural Research,  Greer-Wooten and  of L i f e  York  procedure  i n Canada,"  University,  1978.  used Bharat  Institute  26 3.4  VARIABLE  FORMULATION  Although  some o f  ascertainable to  be  formulated  existed used. best  as  The  goal  this  from  was  was  the  to  the  i t was  number of  results  the  eldest child,  variable  raw  other  3.4.2  NUMBER OF  and  number of persons  raw  data  or  formulate  choice  to  be  variables that variables.  p r o x i e s had the  were  a  t o be  raw  data  In  used.  some In  contained  good v a r i a b l e s r e l a t i v e  to  formulated  These  age  of  included the  the  household  formulated  a choice suit  from  e x i s t e d as the  directly  described  age  of  head. A l l  different  to which  purpose  from  of  form  the  of  study.  next.  CHILDREN e x i s t e d between  household  children  i n the  locational  be  v a r i a b l e s are  i n the  the  cases  VARIABLES  the  to  or  Here a choice children  of  data.  would best  These  In a  had  desired.  the  data  few  formulate  v a r i a b l e s had  e l e m e n t s of  data.  v a r i a b l e s were  the  other  of  several others  that  DIRECTLY AVAILABLE A  the  felt  directly  questions,  desired theoretical  theoretically  3.4.1  raw  select  information to  w h a t was  survey  i m p o s s i b l e and  situations  enough  the  d e s i r e d v a r i a b l e s were  to which elements  represented  cases most  from  the  i n the  household.  stability  less  the  than  18  f a m i l y , and The  goal  i n f l u e n c e of  was the  number years the  of of  age,  number  to capture household.  of the The  the  27  number  of c h i l d r e n  i n the family  did  not include  non-family  the  household's  decision  number years  of c h i l d r e n  The number  children  of persons  likely  have  sharing  a c c o m m o d a t i o n s . The number 18 p r e s e n t e d  influence  was  n o n - r e l a t e d members,  was s e l e c t e d  structure  those  a weaker  i n the household  i tincluded  variable  This  to represent  stability.  was d e s i r e d  or without  was e x p e c t e d  of c h i l d r e n  This family  inertia.  MEMBERS  todifferentiate  non-nuclear  household  i n the  t h e households  family  to positively influence  The f o l l o w i n g  only  type  members.  locational classification  scheme was a v a i l a b l e :  1. 2. 3. 4. 5.  Single Person Nuclear Family Nuclear Family and R e l a t i v e Nuclear Family and Non-Relative Nuclear Family, R e l a t i v e , and Non-Relative  6. N o n - R e l a t i v e s . T h e dummy v a r i a b l e household  types  18  eliminated  few d i f f i c u l t i e s .  on l o c a t i o n a l  A dummy v a r i a b l e with  over  influence.  those  3.4.3 THE E X I S T E N C E OF NON-NUCLEAR F A M I L Y  households  influence'  may n o t b e r e s i d i n g a t h o m e . T h o s e a t  18 w o u l d  under  may  included  because  household  that  because i t  making. A d d i t i o n a l l y , the  i n the family  of age which  home a n d o v e r  was e x c l u d e d  NONFAM w a s c r e a t e d a n d s e t t o 1  3 through  6.  for  28  3.4.4  EDUCATION  LEVEL  A n u m b e r o f dummy v a r i a b l e s various data  levels  uses  of educational  achievement.  education achievement  of  years  spent  i n school.  by  asking respondents  This  rather  what was t h e i r  or otherwise. Possible  the  below.  other  methods  This approach  than  t h e number was o b t a i n e d  highest  categories  level a r e shown i n  i s an improvement  over  s u c h a s t h e number o f y e a r s o f e d u c a t i o n .  At  the intuitive  in  getting  level  there that  i t s t h e achievement  not t h e time  should matter. Also this  allows  one t o d i f f e r e n t i a t e  between  levels  attempted  to quitters.  table  The a v a i l a b l e  information  completed table  were c r e a t e d f o r t h e  as opposed  those  shows t h e raw d a t a c l a s s i f i c a t i o n  that  method complete  The f o l l o w i n g a n d t h e dummy  variable created.  RAW DATA C L A S S I F I C A T I O N  DUMMY VARIABLE ED1 ED2 ED3 ED4 ED5 ED6 ED7 ED8 ED9 ED9 ED10  No s c h o o l i n g D i d n o t complete grade s c h o o l Primary school (with Graduation/Certificate) High S c h o o l (no G r a d u a t i o n / C e r t i f i c a t e ) High School (with Graduation/Certificate) T e c h n i c a l t r a i n i n g beyond secondary s c h o o l Some c o l l e g e o r u n i v e r s i t y Bachelor's degree Master's degree P r o f e s s i o n a l degree or d o c t o r a t e D o n ' t Know The  a b o v e q u e s t i o n was a s k e d  some c a s e s  the household  determined  through additional  example,  of each  respondent. In  head's e d u c a t i o n c o u l d  c o n s i d e r t h e case  survey  where  be  information. For  t h e respondent  was t h e  29  child  of  the  level  was  addressed  respondents This to  household  along  calculate  the  was  head's  the  indicative  level  or  of  the  head.  could  not  be  created  created  head's  difficulties respondents If data  the  respondent. or  This  on  could  head  If  then  the  union  an  the  are  spouse.  indicator  with  the  of  the  classification with  the  status  of  working  were  head  then  membership were  respondent  there  the  HEAD  household  either  the  not  head.  working  be  As  their  associated  the  with  the  as  head  information  achievement,  were  was  dealing  unemployed.  household  HOUSEHOLD  to  or  the  the  from  variables  THE  desired  These  respondent  other  head  stability.  relationship  depend  to  a  the  Thus,  were  used  .  case  eliminated  the  educational  arose.  points  data  were due  the  either  that  be  such  if  this  to  known.  could  determined.  education  m e m b e r s h i p was income  In  respondents  spouse  the  However  refer  education  h e a d was  possible  the  respondent;  and  not  and  head  level.  of  UNION M E M B E R S H I P OF  household  the  was  Those  father's  household household  classification  the  employment  time)  the  and  questions,  education  their  Thus  Union  These  of  spouse  spouse.  head  limitations.  raw  sex  the  information  variable  3.4.5  to  dummy v a r i a b l e s  household thesis  of  Mother's  additional  head's  education  education or  the  the  manipulation  head's  in  relationship with  respondent  head.  three  used.  the  (full  was  two  the  raw  or  part  spouse  data  of  30 results  to evaluate. Specifically,  status,  unemployed  status,  and employed  status union  respondent's  and t h e i r  respondents  were r e q u i r e d .  In t h i s  s t u d e n t ' s spouse spouse's  and t h e i r  case  m e m b e r s h i p d e p e n d e d on t h e s p o u s e ' s  membership  i f the respondent  work  spouse's  the household  work  work  head's  union  was t h e h o u s e h o l d  head's  spouse.  3.4.6  WORKING S T A T U S OF THE Classification  experienced  possibilities  was t h e h o u s e h o l d existed.  or married)  If  any  'working  the respondent  their  work  status  of the l a s t  3.4.7  membership  head  then  t h e r e would then  were method. I f  four  was s i n g l e ( n o t  n o t be a  spouse.  h e / s h e c o u l d be ' n o t  part time', or 'working was t h e s p o u s e  full  of t h e head  was a s s e s s e d , w h i c h  time'.  then  c o u l d have  only been  three p o s s i b i l i t i e s .  INCOME Two c h o i c e s f o r i n c o m e e x i s t e d .  to  then  I f t h e respondent  Where t h e r e was a s p o u s e working',  t o those  T h e y w e r e s o l v e d i n by a s i m i l a r  respondent  coupled  d i f f i c u l t i e s similar  f o r t h e head's union  encountered. the  SPOUSE  p e r s o n a l income w h i l e t h e second  family  income. Both  The  midpoints  the  last  class  The f i r s t referred  measures were c a t e g o r i c a l  of these classes where t h e lower  pertained  to total i n nature.  were a s s i g n e d , e x c e p t f o r b o u n d was u s e d  due t o i t s  31 open and  end n a t u r e . the assigned  RAW  The  income c l a s s e s from  values  a r e as  t h e raw  follows.  DATA  ASSIGNED VALUE $0 $1,000 $3,000 $5,000 $7,000 $9,000 $11,000 $13,000 $15,000 $17,000 $19,000 $22,500 $27,500 $35,000 $45,000 $62,500 $87,500 $100,000  Nothing $1 - $ 1 , 9 9 9 $2,000 - $3,999 $4,000 - $5,999 $6,000 - $7,999 $8,000 - $9,999 $10,000 - $11,999 $12,000 - $13,999 $14,000 - $15,999 $16,000 - $17,999 $18,000 - $19,999 $20,000 - $24,999 $25,000 - $29,999 $30,000 - $39,999 $40,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 and over For  personal  data  income t h e r e s p o n d e n t s  were asked  the following  question. " T a k i n g i n t o account a l l sources of income such as w a g e s , p a y m e n t s f r o m t h e g o v e r n m e n t , r e t u r n on s a v i n g s a n d i n v e s t m e n t s , w h a t was y o u r own p e r s o n a l income b e f o r e t a x e s i n 1976?" Following  this  was a d d r e s s e d .  question  i n the survey  total  f a m i l y income  The q u e s t i o n a s s t a t e d i n t h e s u r v e y  is.as  follows: "What w a s y o u r t o t a l f a m i l y i n c o m e , own i n c o m e , b e f o r e t a x e s i n 1 9 7 6 ? " Family  income i s a broader  to personal  income.  an  unit  economic  information  was  Since  grouping  the behaviour  was o f i n t e r e s t , utilized.  including  your  o f income compared of the household  t h e f a m i l y income  as  32 3.4.8 WEALTH Household the  survey  elements  net equity  allowed  were  two  wealth  sourced  non-real-estate  was d e s i r e d .  t o be d e t e r m i n e d .  from  equity  Information i n  t h e raw d a t a .  Four  First,  was c a l c u l a t e d f r o m  the following  questions: " A s i d e f r o m a n y p r o p e r t y , a b o u t how m u c h m o n e y do y o u a n d y o u r f a m i l y h a v e i n s a v i n g s a n d investments?" A n d " A s i d e f r o m a n y p r o p e r t y , a b o u t how m u c h m o n e y d o y o u owe o n t h i n g s l i k e y o u r c a r , f u r n i t u r e and a p p l i a n c e s , l o a n s , c r e d i t cards and so on?"  The  information  liabilities personal represent  debt.  to non-real-estate  was r e c o r d e d  a s s e t s and  i n hundreds of d o l l a r s .  e q u i t y was c a l c u l a t e d a n d c o n v e r t e d single  A second market  relating  value  of r e a l  house/apartment,  to  dollars.  s e t of questions  The s u r v e y  The n e t  dealt with  estate assets  questions,  the current  and t h e o u t s t a n d i n g  f o r those  that  own  their  a r e as f o l l o w s :  " C o u l d y o u t e l l me w h a t t h e p r e s e n t v a l u e o f t h i s h o u s e / a p a r t m e n t i s ? I d o n ' t mean w h a t y o u w o u l d l i k e t o g e t b u t a b o u t what y o u t h i n k i t would r e a l l y b r i n g i f you s o l d i t today?" A n d " A b o u t how m u c h m o n e y d o y o u owe o t h e t h e mortgages of t h i s house/apartment?" These amounts were b o t h dollars. figure  recorded  After calculating  was a d j u s t e d  Wealth  i n thousands of  the net housing  to represent  single  was c a l c u l a t e d b y s i m p l y  amounts o f p e r s o n a l  and r e a l  wealth,  the  dollars.  adding  together  estate net equity.  the  In this  33 process was  a  number  partially  zero  for  of  missing  corrected  values  by  setting real  r e n t e r s . However, a  variables  were g e n e r a t e d .  c o n s t i t u t e d about  number of 25%  estate  This  wealth  missing  to  financial  of  the  specified  analysis requires  the  use  data  base.  3.4.9  MOVE E X P E C T A N C Y Part  expected to  of  the  holding  determine  Two  period  the  questions  v a r i a b l e . Thus  to  this  an  i t was  households expectations  pertained  of  of  i s s u e . The  essential  mobility. first  is  as  follows: "How l i k e l y d o y o u t h i n k i t i s t h a t y o u w i l l be l i v i n g h e r e t w o y e a r s f r o m now ... v e r y likely ... f a i r l y l i k e l y , o r ... n o t v e r y likely?" Three  discrete choices  a  year  two  time horizon.  towards housing The  question  but  rather  was  a  over  does not  with  five  occurred.  the  current extent  housing this  deal  level  i n the  year  There  The  dealing  i s not  be  five  stated  i n the  with  period.  mobility  services. If services  i m p r o v e d . To  there  consumed  that  year  the  housing  period.  questionnaire  degree  This as  a  over  is directed  year  i t is likely  addresses  desired was  mobility  a  a direct relationship since  between c u r r e n t  a  five  housing  then  disequilibrium over  a  housing  level  unit could  question  over  specifically of  period  with  second question  accommodation  difference the  exist  move the  certain  of  and  what  second  follows:  is  question  34  "Here i s t h e p i c t u r e o f t h e l a d d e r a g a i n . I w o u l d ' l i k e you t o use i t t o d e s c r i b e your housing. At the bottom of the ladder i s the worse housing that you can imagine and a t t h e top i s the best — t h e i d e a l house o r apartment. Where on t h e l a d d e r w o u l d y o u p l a c e - ( a ) Y o u r p r e s e n t h o u s e / a p a r t m e n t ? ... ( c ) T h e h o u s e o r apartment you expect t o l i v e i n f i v e years from now. " In first  comparing  question  is  direct  as  the expected  form  choice  discrete variable. from here  'move' was 'very  reason  i t was  However,  Expectations  i n two y e a r s '  likely'  selected  i t s current  considered  l e d to a conversion  the p o s s i b i l i t y  formulated  mobility. I t  from  t o 'move'  of 'not very  and ' f a i r l y  likely  two  was  likely  and e x p e c t a t i o n s  the other  t o a two  to  not t o  possibilities  t o be l i v i n g  here i n  years.' The  second question  pertaining the  to the level  housing  result or  residential  mobility variable.  f o r analysis. This  living  two  better addresses  and p r e c i s e . For t h i s  formulated  of  two p o s s i b l e q u e s t i o n s , t h e  o f a m u l t i p l e d i s c r e t e v a r i a b l e was  awkward  be  these  equilibrium with  will  year  p e r i o d . The a b s o l u t e  necessitating a  a change  r e q u i r e an a d j u s t m e n t change  from  v a r i a b l e should  move  over  t h e next  be a g o o d  two  years.  the nine  needs  the five point  t o the data  indicator  be a  change,  i n expected  sometime over  s c a l e was c a l c u l a t e d a n d a d d e d  This  information  Disequilibrium could  situation  that  rating  valuable  of e q u i l i b r i u m / d i s e q u i l i b r i u m i n  s e r v i c e s market.  of t h e current  current  yields  base.  of expecting  to  35  3.4.10  TENURE  The  formulation  variable that are  of a current  was r e l a t i v e l y  addresses  this  housing  straightforward.  along  with  tenure The  the possible  question responses  as follows: " I w o u l d l i k e t o a s k y o u some q u e s t i o n s about y o u r h o u s e / a p a r t m e n t . Do y o u own t h i s h o u s e / a p a r t m e n t , p a y r e n t o r w h a t ? " The p o s s i b l e r e s p o n s e s w e r e i d e n t i f i e d a s "Own ... R e n t ... Other (specify)".  The  responses  the  data  labeled  'other'  base and were  o w n e r s h i p was c r e a t e d ,  constituted  eliminated. with  about  2% o f  A dummy v a r i a b l e f o r  owners having  a value  of  one.  3.4.11  L E N G T H OF CURRENT  Variables respondent  family  Five  married, unit  normally For asked  existed. following  t h e number o f y e a r s  their  possibilities  separated,  was " c o u p l e d  was c o n s i d e r e d  are  representing  has m a i n t a i n e d  were c r e a t e d . single,  M A R I T A L STATUS  married.  a r i s e about  long  For those  This  question  marital they  eliminates  a  status  include  and widowed.  i n a romantic  common  If a  r e l a t i o n s h i p "i t concerns  that  law marriages.  ( i nyears) that  exist,  divorced,  individuals married, how  current  that  divorced,  o r widowed,  has t h e i r  current  were c u r r e n t l y  and p o s s i b l e  status  separated the  responses  they  existed:  "How l o n g h a s i t b e e n s i n c e y o u l i v e d w i t h y o u r h u s b a n d o r w i f e ? ... L e s s t h a n 6 m o n t h s ... 7 t o 12 m o n t h s ... 1 t o 2 y e a r s ... 2 t o 3 y e a r s ... More than 3 y e a r s . "  36 The  midpoints  calculated For  the  of  and  these  assigned  open ended  Coupled  read  as  i n terms of  to. t h e  class  individuals  question  groups  the  years  lower  were a s k e d  a  single years  order  similar  A  respondent  was  single  with  CYCLE  number to  there single  of  life  parents.  the  whether  that c h i l d  that are  do  not  about  The married is  the  any  5%  18%  These  of  a b o v e age  age  of  the  of  18  complete  number  was  of  used.  the  based  This  associated  on  marital and  home. single  people  i n c l u d e d those  childless.  data  In  eldest child,  represents  This  who  stage  sample.  Stage-B,  total  the  dummy  types.  which are  are  resides at  children.  that are  represents  childless.  This  sample. Although  i t i s possible for non-family  household.  The  2  were c r e a t e d as  three  stages  Stage-A,  stage,  families  about  This  ... 1 or  fully  v a r i o u s household  widowed and  second  childless in  have  classified.  stages,  still  stage,  divorced-or  contains  out  e x i s t e n c e and  fist  together? m o n t h s ...  cycle stages  eight  status,  The  used.  STAGES  separate are  variable.  question.  classification  t o be  variables total  t o make t h i s had  3.4.12 L I F E  was  follows:  individuals a  separated  b o u n d was  "How l o n g have you been l i v i n g L e s s t h a n 6 m o n t h s ... 6 t o 12 y e a r s ... M o r e t h a n 2 y e a r s . " In  years  coupled group's the  or size  family i s  children  to  be  37  Stage-C If  encompasses  families with  t h e age o f t h e e l d e s t  six  than  the family  children.  This  represents  was t h e s e c o n d  29% of f a m i l y  of school  married  age t h a t  t h e age of t h e e l d e s t  six.  This  family  groups,  type  than  t o have  largest  children. or equal t o  young  group, i t  types.  Here  family  was l e s s  was c o n s i d e r e d  Stage-D contains children  child  young  or coupled  are s t i l l child  living  with  a t home.  h a d t o be g r e a t e r  overshadowed  and c o n s t i t u t e d  adults,  than  the s i z e of other  41% of the reduced  sample. If  the eldest  was  considered  was  labeled  child  had l e f t  home t h e f a m i l y  t o be a t t h e e m p t y n e s t  Stage-E, and c o n s t i t u t e d  stage.  unit  This  group  2% o f t h e s e l e c t e d  sample. Stage-F families. six  through  At Stage-F  and has l e f t  Stage-H  represent  the eldest  home. T h i s  child  single  i s greater  i s the smallest  representing  1% o f t h e t o t a l .  Stage-G c o v e r s  parents  the eldest  l e s s than  and  i s a t home. T h i s  Stage-H above 3%  with  includes  lives  with  single to s i x  s i z e o f 1.3%.  the eldest  a t home. T h i s  than  group  or equal  group has a r e l a t i v e  single parents  s i xand s t i l l  of the t o t a l .  child  parent  group  child  i s almost  38  3.5  SAMPLE S I Z E The  size  of  observations, of  the  data  age, was  main  and  the  taken.  with  active Also occur  the  of  The  restrictions  study,  of  also  level  could  have been  of  disaggregation  market  diversity age  the  used. T h i s viable  with  reduced  the  In  l a r g e enough urbanization  restriction  a  limited  observations.  head's  observation that  households  are  more  to other  age  groups.  types  appears  restriction of  the  size.  on  raw  to  the  data.  the  level  of  Observations above  had  10,000.  above  100,000  this  higher  level  of  major  impact  on  to maintain  test  level  the  centres  order to  to  four  populations  limiting  had  with  the  dealing with  imposed. However have  60%  sample  with  associated  household  noted  fourty  This  about  restriction,  would  where  household  limitation,  number  r e s t were used  the  relative  range.  were  a  855  analysis.  and  of  deleted  viable observations.  stages,  five  includes by  associated  o u t l i n e i t was  urban c e n t r e s  finer  sufficiently  dealt  survey  the  partly  i n the  twenty  second main  while  urbanization  model  study  urbanization,  the  two  general  the  come f r o m  first  housing  greatest  study  original  outliers  between  in this  extent  of  this  the  the  degree  i n the  the  of  for  from  limitations  In  heads  The  used  peculiarities  identification Two  sample  reduced  limits  eliminate  of  the  restrictions.  with  to  LIMITATIONS  of the  the  eight  10,000 or sample  a  the  number  sample  life  cycle  greater  to about  was 70%  of  A  39  A number o f c h e c k s resulted  i f further  on t h e d a t a  decreases  checks  were d e s i g n e d  coding  e r r o r s . Some o f t h e s e  residual  analysis  individual deleted. was  This  occurred  separated  restriction  have an e l d e s t gap.  Thus  before the of  child  data  residence  inherited  their  notwithstanding The to The  that  would  final  were  parents  was t h a t  data  constraint  here  variable  was n o t o b t a i n a b l e  with  unless  that  fell  not obtainable  the respondent  variable  spouse. creation  the desired was t h e  s i t u a t i o n were  level.  The  latter  i f t h e head's spouse completed t h e  and a the spouse's These  errors.  into this  was  that  there,  the respondent  head's union membership and education  place  were t h o s e  of cases  the  on  eighteenth  or the respective  I n a number  head o r spouse. V a r i a b l e s  sixteen  restriction  restricted  was a s s o c i a t e d  Another  16 y e a r a g e  remained  recording  imposed  f o r the study.  proxy.  were  could not  f o ra  i ta f t e r t h e i r  restricted  problems  survey,  they  owners o f t h e i r  home a n d s t i l l  possible  forthis  not allow  a r r i v e d . The f i n a l  be t h e h e a d o f t h e h o u s e h o l d reason  status  I f an  h e a d h a d t o be a t l e a s t  had t o a c q u i r e  Those t h a t  regressions.  to outlier  o r widowed and d i v o r c e d .  nature,  birthday.  These  circumstances or  t h e head of t h e household  child  of a check  size.  i n some c a s e s w h e r e t h e i n d i v i d u a l  the household  the eldest  which  checks a r e connected  one m a r i t a l  and d i v o r c e d ,  was t h a t  unusual  preliminary  h a d more t h a n  imposed  of t h e sample  to eliminate  from  were  restrictions  education resulted  level  was u s e d a s a  i n a further  5%  reduction  40 of  viable observations. After  number  imposing  of data  was  the  restrictions  reduced  from  of  about  this  section  3200 t o 855.  some m i s s i n g p o i n t s w e r e a s s o c i a t e d w i t h u n i o n spouse  working  Regressions less  than  missing  status,  that  855.  values.  At  used  family these  times  income, and  variables  t h e r e was  a  drew  25%  the  However  membership,  wealth. from  a  sample  r e d u c t i o n due  to  of  Chapter MODEL THEORY AND  4 HYPOTHESIS  4.1 MODEL BACKGROUND The often  tenure  utilized  incorporated decision  mobility  family that  that this  tenure life  Since  i n these  concept.  recent  consider the  the research  studies  tenure  of the tenure  and time  interaction  i sdirected  towards  i sto explain  1974; S t r u y k  choice  decision makers  series  model. process i n better  models t o  problems.  urban  housing  current household  and Marshall,  a more  tenure tenure  1974; W i l k i n s o n and  Law, 1 9 7 8 . 2 1  Speare,  1970; Chevan,  i s  studies of  t o c o n s t r u c t and t e s t  market  cross-sectional  The purpose  i t  c h o i c e and t h e m o b i l i t y  f u t u r e r e s e a r c h e r s and p o l i c y  study  Carliner,  Most  and urban  housing  demand-and market  This  and other models  However, g i v e n  2 0  understanding  their  the tenure  of research has not considered  t h e demographic  assist  applying  choice.  market models.  r e p o r t e d on t h e t e n u r e  improved  housing  and a t times  area  cross-sectional  should  demand m o d e l s ,  i t i s now p o s s i b l e  2 1  applicability. I t ' s  d e t e r m i n a t i o n do n o t e x p l i c i t l y  cycle  from  literature  2 0  housing  has wide  and associated impacts.  decision  This  into  has been  solid  i n housing  i s often important  surprising  housing  choice decision  1971;Pickvance,  1976  41  1974; M c C a r t h y ,  42 rather on  than  predicting  the behaviour  different life  of the household  family  cycle  f u t u r e s c e n a r i o s . Emphasis  life  stages  cycle  a r e seen  and expected  decision.  expected  holding  study  follows  decision  of households  expected  mobility,  (1984).  possibilities time  versa  mobility  (Boehm,  Boehm  the tenure  from  affect  c h o i c e and  (1981) and  decision  mobility.  expected  was i n d i f f e r e n t  was The  Krumm dependent  four within  a  probability  t o be t h e most  indicator  of tenure  c h o i c e , and  and income of t h i s  Boehm e s t i m a t e d a  probability t h e Krumm  model study  i n that the decision  independent  simultaneous  c h o i c e and m o b i l i t y  was f o u n d  tenure  were  joint  decision.  the m i g r a t i o n d e c i s i o n that  b y Boehm  1981;381,386). Wealth  (1984) l i k e  tenure/mobility results  on t h e  t o tenure  t o be t h e o t h e r m a i n d e t e r m i n a n t s  Krumm  of  services.  future expected  significant  tenure/mobility  The  study  of  to the l i k e l y  frame a r e e s t i m a t e d w i t h a l o g i t  statistically  found  refers  i n regards  of f u t u r e tenure  model. Expected  vice  a t the time  t h e r e c e n t work  as developed  I n t h e Boehm  upon t h e h o u s e h o l d s  limited  mobility  with  family  the importance  mobility  period f o r acquired housing  This  i tvaries  stages. S p e c i f i c a l l y , to affect  income, w e a l t h Here  a n d how  i s placed  variables mobility,  with a logit supported  t o change  and v i c e  however making  framework.  those  tenure  v e r s a . Krumm  o f t e n used  directions  joint  o b t a i n e d by  was d e p e n d e n t  on  pointed out  to predict  i n some c a s e s  tenure  also  the effect  the net e f f e c t  on t h e  43 joint  probability  simultaneity  the c r i t i c a l  result.  i n model s t r u c t u r e  between t e n u r e and e x p e c t e d  This suggests  some  t o capture the net e f f e c t  mobility.  4.2 MODEL THEORY This study decision family of  i s concerned  of households  life  interest.  expected  cycle  B o t h Boehm ( 1 9 8 1 ) a n d Krumm  future mobility  this  mobility.  are i n transition  i t i s their  past tenure should not a f f e c t the household  reflect  mobility  Combining the importance  between s e t s of  mobility will  i s in transition,  current tenure  will  decisions. of t h e m o b i l i t y from a  income, w e a l t h , and e x p e c t e d  result  with  theoretical  mobility  i n f l u e n c e s . One h y p o t h e s i s o f t h i s  study  s h o u l d be i s that  s h o u l d be i n c l u d e d i n t h e t e n u r e m o d e l , a n d t h e r e  be d i f f e r e n c e s  socio-demographic other  mobility at  f u t u r e t e n u r e c h o i c e . However,  past tenure choice research suggests,  important  tenure  h o l d i n g p e r i o d and thus  i s not i n t r a n s i t i o n  past expected  perspective,  tenure  I t seems l o g i c a l  f u t u r e expected  time t h a t i n f l u e n c e s t h e i r  results  (1984) a r g u e t h a t  i s d e p e n d e n t on c u r r e n t  t e n u r e c h o i c e . Thus when t h e h o u s e h o l d  if  several  but i n the o p p o s i t e d i r e c t i o n ,  t h a t when h o u s e h o l d s services  i s a f f e c t e d by  studies yield  i s d e p e n d e n t on e x p e c t e d  housing  tenure  a n d how t h a t d e c i s i o n  stages. Past  choice. Similarly, choice  with the current  i n tenure c h o i c e based  characteristics  s t u d i e s . Of i n t e r e s t  which  on  a r e w i d e l y used i n  a r e demographic l i f e  cycle  stages  44  and  their  impact  the  tenure  on t h e i m p o r t a n c e  decision.  Socioeconomic reflected cycle  Speare and  by l i f e  stages  follows  into  from  factors cycle  Chevan  stages  and  that household  one  stage  marital  Overall,  (1983).  attempts  t o prove  made f o r f a m i l y  life  Life  cycle  t o achieve tenure  choice cycle  life This  (1976),  Sweet  agree  that  of housing  stages  some  family needs,  children.  different  among t h e v a r i o u s f a m i l y  this  study  a more•accurate  on t e n u r e life  model  i f allowances are  stages. Second,  o f income a n d w e a l t h  from  stronger conclusions  i s possible  influence  from  are determined  choice behaviour First,  of  (1977),  coincides with transitions  two t h i n g s .  tenure  of  i s logical.  the e x i s t e n c e of and age of  t o household  are often  studies literature  determinants  mobility  i n order  predicting  and urban  These a u t h o r s  a r e major  relating  for  choice  (1971), McCarthy  t o the next.  status,  t o behaviour  of tenure  the demographic  (1970),  cycle  related  s t a g e s . The i n c o r p o r a t i o n  a model  C l a r k a n d Onaka  life  of income and w e a l t h i n  that the relative  choice are cycle  stage  groupings. In  order  literature, cycle  a tenure  stages,  mobility,  to test  the concepts c h o i c e model  income a n d w e a l t h  and other  demographic  presented should  include family  variables, impacts  by t h e life  expected  on t e n u r e  choice.  45  4.3  TENURE  CHOICE,  EXPECTED MOBILITY  AND  HOUSEHOLD  ATTRIBUTES There  are  tenure  choice;  number  of  three  income,  variables  research  are  expected  mobility  attributes, inherent be the  with  household  mobility.  changes  status  of  the  children.  opposite  housing  in  stability  factors Age married  children  the  of  the  effect  and  household. likely  services  the  membership.  Further  the  number  level  be  Employment incidence  mobility is  tend  the to  household affect  head and  mobility  the  to  of  on  measurable  through  non-nuclear-family growth  the of  and  and is  household-head these  mobility  follows. of  in  related  impact  mobility  discussion  marital  consumption  income  of  of  to  when  the  their  of  expected  education  and  to  Age  tend  household  should  Employment  reduce  change  the  tend  attributes.  married  and  and  variables  may a f f e c t  through  the  Since  separation.  the  A  in  constraint  income  effects  possibly  This  or  of  household  These  also  both  size  neighbourhood  through  union  The  of  this  model  mobility.  choice.  years  divorce  these  will  measured  of  of  rates  However,  of  of  the  mobility  demographic  number  affects  the  members  on a n u m b e r  spouse  inertia.  number  tenure  appropriate.  because  stability  and  affect  household  in  expected  expected  Mobility  cumulative  and  is  directions.  locational  and  elaboration  head and  status  of  to  proposed  affect  depends  further  associated  wealth  that  expected  variables  decrease  constraints  number  negatively,  of  and  years at  a  46 decreasing  rate.  and/or  number o f  of  the  moving  different  in  (1971),  each  each  and  life  rigorous  cycle  children  has  that  a  the  mobility,  decreases.  chances  of  reasons.  current  income and  by  First,  two  also  accumulation.  o v e r c o m e down p a y m e n t a n d  similar  a  income  the  on  results. number  with  the  less Sweet  of number  re-marriage  single  parent  thus  household the  s e p a r a t e d , widowed expected  number  or  mobility  head age,  and  to p o s i t i v e l y  years  influence  mobility.  spouse  rate  accumulation debt  the  studies through  i s compounded by  as  be  (1970:454),  more  i s included for  income households  a higher  The  while higher  the  to  Speare  parents  decreasing  s t a t u s of  found  (1976) and  household  expected  smaller  of  r e - m a r r i a g e , and  study  probability  independent  Other  as  older  Additionally,  influence  This effect  decision  employment  ownership  McCarthy  number of y e a r s  several  wealth  t o be  number of y e a r s  or d i v o r c e d , are  The  (1976:14).  for single  These v a r i a b l e s ,  ownership  by  stage  have o b t a i n e d  i s i n c l u d e d i n the  variables.  the  the  The  i n s m a l l e r and  cycle  (1974).  gets  increases the  were  significant  increases  divorced  by  so  head  d i v o r c e d or widowed along  As  children.  household  of m o b i l i t y  found  investigations  separated,  married  was  stage  behaviour.  of  life  by.Pickvance  (1977) p o i n t s out  of  does  McCarthy  h e a d ' s age  conclusively  years  and  the  married  These elements  within  household  i s , as years  decreases,  increments.  Chevan  That  service  have  of e x p e c t e d of w e a l t h  future  assists  constraints  income makes o w n e r s h i p  higher  more  to  for desirable  47 because  of  returns. degree has  tax  A  of  second  Quite  the  are  born,  the  children  before  then  will  one  children  children  higher the  degree  are  pre-children  affect while  with  born  result  was  found  separation The  also  by  at  working  the  may  pre-school  McCarthy  life  cycle  children  not  neighbourhood q u a l i t y mobility  as  disruptive  number  of  children  to  of  becomes n e c e s s a r y household  is also  and  have to  an ownership  because  of  a  Thus,  leading stage with  to  during  ownership,  spouse  not  ownership.  supports  seen as are  purchase  the  age  a  This concept  mobility  location  housing  schooling  school  increase  stage  stage.  and  the  may  until  should p o s i t i v e l y  (1976) and  children  only  children  cycle  consumption.  positively correlated by  life  stage  locational stability i n the  until  contribute  pre-school  a  considers.  f r o m work  status  spouse working  households  coordinate  i n the  (1976)  employment  one  leave  stage  viewed  to  take  greater  McCarthy  income e a r n e r s  Thus,  factor. Generally  Additionally,  often  two  stage  service  number of  reducing because  be  cycle  investment  is a  spouse's  employment  not  children  will  be  the  housing  income and  working  of  are of  life  school.  income e f f e c t , w h i l e while  of  spouse w i l l  enter  there  locational stability.  which  there  sheltering  i s that  influence  d e p e n d s on often  through  influence  income and  suggested  status  influences  services  is  maturation  process.  within  household  more e c o n o m i c a l  activities  from  but  services.  children  the  sensitive  the  for  often Also,  as  unit one  home.  the  i t  spouse These  48 factors,  through  the axiom  1 9 7 0 : 4 4 9 , 4 5 5 - 4 5 6 ) , may Bossons  housing and  affect  space are viewed  Marshall  that  the extent  t o which  (1974) and McLeod and E l l i s  has a s i g n i f i c a n t  a similar  way  t o the effect  i s likely  to increase residential  According  to Struyk  and M a r s h a l l  whether  these  non-family  family  extra household  members  These e a r l i e r  Struyk found  affect  on  order  to capture  stability  educational education  approach  two v a r i a b l e s  achievement  factor  of prior  of formal  study  stability.  i t does not  matter  are family or  e x i s t e n c e does treat  they  a l l non-nuclear  are boarders  i s taken  matter.  in this  or study.  are included i n the study;  and union  m e m b e r s h i p . The l e v e l  h e a d was  positively  studies.  i n the  e x p e c t a t i o n s of f u t u r e income and  of the household  significant  years  This  (1974)  t h a t we  t h e same, w h e t h e r  relatives.  In  suggest  f a m i l y members  members  however, t h e i r  results  members  distant  level  and  o f t h e number o f  household  this  activities  (1982) have  the e x i s t e n c e of non-nuclear  of  t h e number  S t u d i e s by  children,  number  with  and  choice.  In  wealth  stability  leisure  as complementry.  t h e number o f c h i l d r e n  tenure  along  (Speare  stability.  locational  t h a t t h e number o f c h i l d r e n ,  adults,  inertia  a l s o add t o l o c a t i o n a l  (1978) a l s o d i s c u s s e s t h i s  suggests of  of cumulative  found  affecting  t o be a  ownership  I t i s o f t e n measured  s c h o o l i n g . The d a t a  of  base  in a  by t h e number  t o be u s e d i n  e m p l o y s a s c a l e o f 1 t o 10 t h a t m e a s u r e s t h e  of the achievement  rather than  the time  involved. This  49 may  be a u s e f u l  correlated  measure  with future  (1978) s u g g e s t s  housing  style  imperfect housing  housing  may  A second membership. impact of  affected if  of  possible of  the both  or union  employment  and  i n an  unique  income e x p e c t a t i o n i s union i s expected  stability  membership  t o have a  as w e l l  The  then  positive  as the r a t e  of employment  variables.  income  of  affects  ownership.  there  instability,  of  growth  is likely  h y p o t h e s i s here  does not have e i t h e r  and  consumption.  of e d u c a t i o n  of tenure  through  earnings. Stability by  education i s  for uniqueness,  security  This variable  the household  skills  the l e v e l  a n d demand  measure  on e m p l o y m e n t  future  that  market  o n l y be  that  income and h o u s i n g  Bossons  tastes  to the extent  i s that  higher educational i s a higher and thus  likelihood  a desire for  mobility. Two include directly  other variables  that  are household  income and w e a l t h . Household ascertainable  from  the data.  attributes  income and w e a l t h i s  50  TABLE 1 ECONOMIC/MOBILITY V A R I A B L E S : E X P E C T E D S I G N WHEN R E G R E S S E D ON OWNERSHIP (1) F a m i l y ( " h o u s e h o l d " ) income. (+'ve) (2) W e a l t h (amount s a v e d / i n v e s t e d - amount owed + p r e s e n t v a l u e o f home - a m o u n t o w e d o n m o r t g a g e ) . (+'ve) (3)  Employment s t a t u s of spouse working). (+'ve/-'ve)  (4) Number o f y e a r s m a r r i e d w i d o w e d ) (+'ve) (5) H o u s e h o l d  (Full  (separated,  heads age i n y e a r s .  (6) Number o f c h i l d r e n  time/Part  time/Not  divorced, or  (+'ve)  i n household.  (+'ve)  (7) Number o r e x i s t e n c e o f f a m i l y members (+'ve)  in  household.  (8) H o u s e h o l d Head's h i g h e s t l e v e l o f e d u c a t i o n c o m p l e t e d ( o r e x p e c t e d ) on a s c a l e o f one t o t e n . (+'ve) (9) U n i o n  membership of household  4.4 U S E OF R E G R E S S I O N Insights Regression  are often obtained  between a dependent factors,  methodology  i s determined  independent  to help variable  the researcher  i s not a substitute  rather a technique  relationship those  and y i e l d  thoughts.  Miller  empirical analysis. understand  t o support  Once t h e c o r r e c t  can gain  relationships.  forrational  the  and i t s  variables.  the strength of hypothesized  analysis but  through  c a n be u s e d  influencing  into  (+'ve)  ANALYSIS  techniques  relationship  head.  insights Regression  intuitive  thought  the theoretical  some c o n c l u s i o n s a s t o t h e n a t u r e o f and Wichern  (1977:176,177)  argue  51 along  similar  grounds.  " E s s e n t i a l l y a l l s c i e n t i f i c investigations are c o n c e r n e d w i t h u n d e r s t a n d i n g and e x p l a i n i n g o b s e r v a b l e phenomena. I n the s e a r c h f o r e x p l a n a t i o n s o f t h e s e phenomena, one i s ' f r e q u e n t l y f o r c e d w i t h m o d e l l i n g r e l a t i o n s h i p s among s e v e r a l v a r i a b l e s I n many s t i u a t i o n s ... g e n e r a l m o d e l s a r e r e q u i r e d i n d i c a t i n g 'how' and ' t o what e x t e n t ' a response v a r i a b l e i s r e l a t e d t o a set of independent v a r i a b l e s . ... S u p p o s e f o r a g i v e n p r o b l e m t h e true f u n c t i o n a l r e l a t i o n s h i p between the response or d e p e n d e n t v a r i a b l e and members o f a s e t of i n d e p e n d e n t v a r i a b l e s i s known. The i n v e s t i g a t o r i s then i n a p o s i t i o n t o u n d e r s t a n d , p r e d i c t , and perhaps even c o n t r o l the response. U n f o r t u n a t e l y t h e r e a r e v e r y few s i t u a t i o n s i n p r a c t i c e i n w h i c h the t r u e f u n c t i o n a l r e l a t i o n s h i p between v a r i a b l e s c a n be d e t e r m i n e d , p a r t i c u l a r l y i n t h e s o c i a l sciences. Consequently, one i s f o r c e d , t h r o u g h the i n t e r a c t i o n of t h e o r y and e m p i r i c a l e v i d e n c e , t o d e v e l o p m o d e l s t h a t c h a r a c t e r i z e i n some way the main features of the b e h a v i o u r of the response v a r i a b l e s . Frequently these 'approximating' models i f c o n s t r u c t e d w i t h c a r e , have a r e a s o n a b l y simple s t r u c t u r e and y e t a r e p o w e r f u l enough t o a i d i n t h e r e s o l u t i o n of p o l i c y q u e s t i o n s and i n the f u r t h e r development of the u n d e r l y i n g t h e o r y . In a d d i t i o n , t h e y can p r o v i d e a c c u r a t e and r e l i a b l e f o r c a s t s of f u t u r e response values."  4.4.1  LIFE  C Y C L E S T A G E I M P A C T ON  THE  TENURE MODEL  INTERCEPT Showing  that  life  c y c l e stages  supports  the  concept  mobility  are  a f f e c t e d by  of  life  that  cycle stages  variance According  not  literature,  there  such  should  captured  to the  income,  i s reason  c h a n g e by  family l i f e  household  reacts to  account  and  important  wealth,  stages.  explicitly  demographic  are  by  and  Thus the  the  model  T h u s how and  the  variables.  studies  to believe that  income, w e a l t h ,  inclusion  f o r some o f  urban  cycle stage.  expected  preferences the  expected  52 mobility  d e p e n d s on t h e i r  Determination life  c y c l e g r o u p s c a n be a s s e s s e d  intercept  impacts  value.  Although behaviour  within  d i f f e r e n c e s among through  exists  life  cycle  equation  then  life  cycle  different.  cycle stage  these  groups  g r o u p s may  be  as compared  different,  to others  be t h e same. I n t e r c e p t d i f f e r e n c e s s u g g e s t  initial  wealth  that  i s another  question. Household  i n f l u e n c e s c a n be seen  coefficients.  This  different concepts  elasticity discussed  importance briefly  of a second  by l i f e  imply  c y c l e s t a g e . Key  i n the l i t e r a t u r e c y c l e stage  test  that  support the  a r g u m e n t a r e now  presented.  Family  life  mobility  cycle stages  and tenure  choice  (1955) and has s t o o d  refinements based  regression  S u c h d i f f e r e n c e s may  values  of the l i f e  reactions to  through  i s the focus  i s discussed latter.  Glick  different  p r o p e n s i t y r e a c t s t o changes o f income and  identifiable slope  may  p r o p e n s i t i e s o f h o m e o w n e r s h i p . How t h e  household's  t o the concept  on t h e m a r i t a l  household, and  life  stage.  on t h e r e g r e s s i o n  I f an impact  groups are d i s t i n c t l y  for  cycle  o f income and w e a l t h  dummy v a r i a b l e  not  life  whether  as a framework was f i r s t  the test  although i s  s t a t u s o f t h e head o f t h e  children  (1966) d e f i n e d stages  by  This concept  the e x i s t e n c e and age/schooling those  analysis  suggested  of time,  have occured.  of  are s t i l l  of  a t home.  children, Gruber  i n terms o f t h e age of t h e  53  youngest defines  child  while  stages  according  to  psychology  by  set  parents  of  the  will  affect  period.  family  the  Early  addition  instability family  marriage  with  these  forces  enter  school.  preference  This  was  housing the  This  The  from  as  the  be  a  with and  of  arrival  of  well  of  addressed  the  by  analysis  as  an  that  stage  In  to  of  mobility. into  the  shift  early  time of  increase affect  to  cycle  children.  McLeod and due  likely  in regards  duration  to  uncertainty.  for  e s p e c i a l l y by from a  related  have  elements  desire  2 2  income  needs c o n t i n u e s  factors  effect  their  these  single  consumption  generally  uncertainty  the  include  life  that  family  become  to  i t is also  each  for  to  has  attention.  combined  results  function  p r o b l e m was  excluded  time  stabilize  c e r t a i n t y of  lifestyle.  will  to  strongly  of  stages  is also  there of  stages  employment, c a r e e r ,  d e v e l o p m e n t . Due  Uncertainty  2 2  cycle  the  Extensions  are  tenure  which  with  approach  more  horizon  durations  there  uncertainty,  and  time  (1971)  child  fitting  preferences  form of  short  cycle  Duvall  eldest  years.  cycles  or  by  latter  received  life  life  early  This  life  patterns  the  i s more  in recent  family  study  of  (1979)  expected  relatively  age  currently  consumption that  later  literature.  has  Since  the  Nack  more commonplace normal  a  of  children  the of  household stability  one's one's  Ellis  data  However,  life  (1980)  but  limitations.  54 cycle  stage  through each  the  life  affect will  1;  cycle  The  c  cycle  tenure for  mainly  of  other  the  the  The of  procedure  of  model  proper  the  from  test  This  within  factors  mobility  that  factors  data life  tenure  w i t h and  i f  choice  i s that there  is  no  without  life  requires that be  added  that w i l l  be  used  stages  compares both is a  For  to to  a the  test  i s composed  a complete  and  strong p o s s i b i l i t y cycle  will  exist.  The  and  use  of  incorrect  the a s s o c i a t e d  two  v a l u e s . For  that  stages  the p o s s i b l e at  a  life  stage  a Chi-squared  model a p a r t i a l  compare models..This  STAGES  observations.  looking  be  CYCLE  i s to determine  simply  cycle  overcomes  would  LIFE  variable  variables  statistics. test  model  independent  just  likelihood  probability  other  reject  specification  independent  coefficient  from  f i t of  model. There  evaluation  a number o f  study  to  cross sectional test  controlled  s t a g e s . However,  r e l e v a n t i n the  specification.  collinearity  complete  this  hypothesis  stage  incomplete  the  are  significance  The  the  of  c h o i c e model.  the  These  be  later.  test  i n the  stage  there are  mobility.  stages  difference  these  can  T E N U R E I N T E R C E P T AND  first  decision.  life  stage  discussed  The  cycle  s e p a r a t i o n of  cycle  TEST  life  desired mobility  expected  be  4.4.2  on  a three  f-test  collinearity  can  logistic test  calculated  stage be  problem  linear  used is  model  to  possible  a  55  because  a s one  through  the l i f e  income and  cycle  wealth  overcome  any  possible  models  where;  ages there  bias  i s a natural  stages  increases. due  c a n be  along The  progression  with  model  a tendency f o r  test  to the c o l l i n e a r i t y . s p e c i f i e d as  p{T=1} = / { I , W,  EM,  p{T=l}  EM,  = / { I , W,  ~ EM = / { S E , M/D,  A,  C,  will The  follows:  DEM] DEM,  0,  LCS}  ED,  U)  two  56  VARIABLES AND EXPECTED IMPACT I = Current household  income.  (+'ve on  ownership)  W = Current household wealth (savings/investments amount owed + c u r r e n t h o u s e v a l u e - o u t s t a n d i n g m o r t g a g e d e b t ) . ( + ' v e on o w n e r s h i p ) EM = E x p e c t e d m o b i l i t y ( n o t l i k e l y t o be l i v i n g a t t h e same a d d r e s s i n two y e a r s , a s c o m p a r e d t o b e i n g l i k e l y o r somewhat l i k e l y ) . (-'ve on ownership) DEM = S i g n i f i c a n t ownership)  socio-demographic  LCS = L i f e c y c l e s t a g e +'ve on o w n e r s h i p )  variables.  ( s e e T a b l e #1).  (? on  (-'ve t h e n  SE = S p o u s e Employment s t a t u s ( F u l l T i m e , P a r t Time, o r N o t W o r k i n g ) . (+'ve t o - ' v e on m o b i l i t y ) M/D = Y e a r s m a r r i e d , d i v o r c e d , s e p a r a t e d , o r widowed r e l e v a n t t o c u r r e n t m a r i t a l s t a t u s , (-'ve on m o b i l i t y ) A = Age o f t h e h o u s e h o l d h e a d , C = Number o f c h i l d r e n  (-'ve on m o b i l i t y )  i n the household.  (+'ve)  0 = Number o f o t h e r ( n o n - n u c l e a r f a m i l y ) members i n t h e h o u s e h o l d , (-'ve on m o b i l i t y ) ED = E d u c a t i o n a l l e v e l ( s c a l e 1 t o 10) o f t h e h e a d o f t h e h o u s e h o l d , (-'ve t h e n +'ve on m o b i l i t y ) U = u n i o n membership of t h e h o u s e h o l d head, mobility)  (-'ve on  57  In mainly  total  child,  cycle  stages have  on t h e r e s u l t s o f p r i o r  literature. status,  8 life  These  stages  the existence and whether  stages are reported  studies  a r e based  been  identified  reported  based  i nthe  on t h e m a r i t a l / c o u p l i n g  of c h i l d r e n , t h e age of the e l d e s t  any o f t h e c h i l d r e n have i n Table  left  home.  These  #2.  TABLE 2 L I F E CYCLE STAGES: (not c u r r e n t l y married/coupled),  (A)  Single  no c h i l d r e n .  (B)  Married/coupled,  never  (C)  Married/coupled,  eldest  child  l e s s than  (D)  Married/coupled, eldest school/household).  child  a g e 6-19 ( i n  (E)  Married/coupled,  (F)  Single home.  (divorced,  (G)  Single  parent,  eldest  child  less  (H)  S i n g l e parent, eldest school/household).  child  a g e 6-19 ( i n  had c h i l d r e n .  children left widowed,  home  6.  (empty  separated),  than  nest).  children  6.  left  58  As data. and  mentioned,  One w i l l  t h eother  equations,  two r e g r e s s i o n s  include will  life  will  cycle  be f i t t e d  s t a g e s a s dummy  n o t .Formulated  i n terms  of  to the variables  regression  t h etwo models a r e as f o l l o w s .  T = a + 0,1  + 0W  T = a + 0 , I + 0 +  + j3 EM + 0 „DEM + e  2  2  3  0 E M + 0„DEM + 0 5 S T A G E . A + 0 S T A G E . B  W +  3  6  + 0, STAGE.H + e 2  Where; T = P r o b a b i l i t y o f o w n e r s h i p . e The  = Residual  null  errors.  hypothesis  significance  comparing  of an i n t e r c e p t  these  two models and t h e  impact  from  family  life  cycle  stages i s : 05=06=.•.=0i2=0  H : 0  Rejection there  of this  i s an impact  regression  4.4.3  null  hypothesis  of family  life  indicates cycles  that  on t h e  intercept.  T E S T 2; I N D E P E N D E N T V A R I A B L E C O E F F I C I E N T CHANGE BY L I F E CYCLE There  stage wealth  GROUP  i sreason  affects  to believe  t h e importance  and income  Marshall  the  income e l a s t i c i t y  significantly  (1975)  support  thel i f e  o f other  on t h e t e n u r e  and  that  this  choice  cycle  variables  such as  decision.  concept  -  as they  Struyk found  o f h o m e o w n e r s h i p t o be  d i f f e r e n t among h o u s e h o l d s  based  on f a m i l y  59 type,  age,  specific  and  s e p a r a b i l i t y of  and  income.  and  Ellis  find in  race. McCarthy  Bossons (1982)  empirical  addition The  support  that  different  market  type  separability McLeod and  income  and  concept  follows  work w h i c h  s t a g e s can  relatively  by  cycle  based  Chevan  home  ownership,  influences  stage  indicators  curves e x i s t  held  and  for  exists within  stage).  suggest  on  to define  observed  Sweet  by  the  family  subgroups  consumption  Awan,  support life  with  requirements  (1970), Speare  by  (1977:365),  This  that  this  The  explicitly  (1982:195).  homogeneous h o u s i n g  preferences, studies  be  McLeod  impact.  cycle  (1980:177), Whitehead  cycle  ( 1 9 8 1 ) , and  i s s u p p o r t e d by  Odling-Smee and earlier  stages  homogeneity  life  with  cycle  when t h e r e i s d e l i n e a t i o n  (family  Ellis  life  for different wealth  different utility  heterogeneous  same r e s u l t  models of  using l i f e  households,  household  cycle  to the v a r i e d of  the  family  ( 1 9 7 8 ) , Ranney  in life  approach  suggests  the  finds  or decision  (1971), and  Golant  (1977).  4.4.4  T E S T I N G FOR  C O E F F I C I E N T I M P A C T S OF  LIFE  CYCLE  STAGES The there  second  test  i s a difference  income,  and  of  this  i n the  w e a l t h between  study  i s to determine i f  relative  the  family  influence life  cycle  of stages.  60  Regressions  f o r t h e combined  and  income  the  e v a l u a t i o n of independent  between  format  includes  results with  both  of t h i s  statistic  income a n d w e a l t h model  three  model  This  stages  allows  differences  of the equations  to represent the of each  variables either  cycle  t o t h e same  model  removed. The t e s t the Chi-squared  values, or the f-value on whether  i s used.  life  i s i n c l u d e d . The  be c o m p a r e d  v a l u e s , depending  stage  as  will  i s , as before  R-square  are  forthe specification  the likelihood  cycle  groups.  the interaction  from  variable  s t a g e s . The i n t e r a c t i o n  with  of l i f e  a r e employed.  t h e u s e o f dummy v a r i a b l e s  cycle  stage  as wealth  the various  The  life  as well  effect  value  from  model  a two stage o r  The e q u a t i o n  specifications  follows:  T = (a+d) T = (a+6)  + /3 T A + /3 B + 0 C + /3„D + e + (/3,A) + ( 0 B ) + 5 , ( 0 i A ) + 2  $ (/3 B) 9  3  2  2  ... $  1 6  (0 B) 2  $ (0iA) 8  + 0 C + 0«D + e 3  Where: A B C D e Testing wealth  = = = = =  that  life  cycle  stages  a n d income v a r i a b l e  following  null  Ho •  The  Wealth Income Expected M o b i l i t y Relevant Demographic V a r i a b l e s Residual errors  hypothesis  $i  =  methodology  do n o t have an impact  coefficients  on  implies that the  i s true.  ««« i>i6 0 =  =  fortesting  these  two h y p o t h e s i s  under t h e  +  two  stage  the  next  and  chapter.  presention  of  results  the  model).  three  of  the  stage  The  frameworks, a r e  hypothesis  final  mover  model  results  specification  separability  of  tests  discussed  follow the (from  in  the  model and the  two  the stage  5  Chapter  M O D E L I N G METHODOLOGY  5.1  THE S I M U L T A N E O U S TENURE C H O I C E MODEL The  t h e o r e t i c a l r e l a t i o n s h i p , between  influencing preceeding wealth,  v a r i a b l e s , t o be e x p l o r e d chapter.  income,  Tenure choice  the expected  was t h e o r i z e d  holding  period  v a r i a b l e s such as l i f e  expected  period  than not  income o r w e a l t h .  known i t c a n be e s t i m a t e d  mobility. is and  The d e m o g r a p h i c  continuous mobility  stability,  use  of regression  current  tenure  life  cycle  i n question.  and  One's  to obtain period i s  us t h a t  mobility employment  stages.  of m a r i t a l rate  For the status  with  Discrete  variables,  s t a t u s , and l i f e  on t h e i n t e r c e p t v a l u e .  i s relatively  on  i n terms of  at a decreasing  cycle  Estimating  straightforward through the  analysis. i s i n the process  and t h e r e f o r e  and m o b i l i t y . However,  household tenure.  impact  a household tenure  stages.  and i t s l e n g t h ,  s t s t u s , employment  mobility  When no  to decrease  generally  expected  and f a m i l y  of the influence  such as m a r i t a l stages,  status  t o depend  holding  tells  v a r i a b l e s of age and l e n g t h  tends  increases  separately  literature  r e l a t e d t o age, m a r i t a l income  cycle  the expected  i nthe  f o r housing,  i s much more d i f f i c u l t When  and  was d i s c u s s e d  sociodemographic holding  tenure  completes  of moving  no r e l a t i o n s h i p between  this  i s not t h e case once t h e  i t s move a n d s e l e c t s a h o u s i n g  I f the household's  expected  62  there i s  holding  period  u n i t and i s long  63 then  i t i s theorized  that  influence  on o w n e r s h i p .  conducive  to renting.  move, t h e f o r m  this  will  have a  positive  Likewise, short holding periods are  Once t h e h o u s e h o l d  of tenure  chosen  has completed i t s  i s an i n d i c a t o r  expected  holding period  was a t t h e t i m e  suggests  a simultaneous  relationship  of purchase.  by t e n u r e and i n o u r g e n e r a l model  influenced  by e x p e c t e d  over  i s the nature  joint  thus  simultaniety.  i t would  mobility. tenure in  t h e r e would  expected  a r e taken  mobility  mobility  after  mobility  move. T h u s t h e j o i n t an i m p o r t a n t  would  recorded  while  factor f o r  still  affect  simultaneous but  on t e n u r e .  factor  at the time  simultaneous  role  concern  Because  t h e c o m p l e t i o n o f t h e move  becomes an i m p o r t a n t e x - p o s t expected  this  be no c u r r e n t t e n u r e a n d  c h o i c e . T h i s w o u l d make t h e p r o b l e m  households  play  causes  I f o b s e r v a t i o n s were  However, expected  observations tenure  that  n o t be a n i m p o r t a n t p r e d i c t i n g  one d i r e c t i o n ;  tenure i s  mobility. of the data  households a r e moving  This  as mobility i s  influenced  It  o f what i t s  nature  i n predicting the  of the previous exists  and  will  i n tha analysis.  5.2 E M P I R I C A L SUPPORT FOR THE S I M U L T A N E O U S APPROACH The mobility recent  simultaneous  nature  between c u r r e n t  a n d t e n u r e c h o i c e has been  research efforts.  found  that  simultaniety  Boehm  ( p . 383,386) found  Boehm  expected  t h e s u b j e c t of two  ( 1 9 8 1 ) a n d Krumm  was a m a j o r expected  factor  mobility  (1984)  both  of the model. t o be t h e m o s t  64 statistically vice  v e r s a . Krumm,  obtained that  several  independent  affects was  significant  expected  in different  indicator  of tenure  who u s e d a l o g i t  results  parallel often  mobility,  however  joint  probability  Boehm  ( p . 376) t h r o u g h  probability  used t o p r e d i c t  from  points out tenure  i n some c a s e s  The r e l e v a n t  as determined  framework,  t o B o e h m . Krumm  variables  directions.  c h o i c e , and  the effect  factor  i sthe  a simultaneous  h i s investigation  found  also  model.  that;  "because of t r a n s a c t i o n s c o s t s , expected f u t u r e m o b i l i t y i s a l s o d e p e n d e n t on c u r r e n t t e n u r e c h o i c e . Thus, t h e p r o b a b i l i t y t h a t a h o u s e h o l d makes a g i v e n t e n u r e c h o i c e a n d e x p e c t s t o move s h o u l d b e estimated as a simultaneous set of equations. In past a n a l y s i s a f a i l u r e t o consider t h i s interaction has r e s u l t e d i n i n c o r r e c t i n t e r p r e t a t i o n s of t h e s o c i o e c o n o m i c f a c t o r s on m o b i l i t y a n d t e n u r e decisions."  5.3 R E C E N T V E R S E S NON-RECENT MOVERS The causes  ex-post  simultaniety  mobility facto  important  non-recent  of the data  likely  over  tells  us t h a t  expected  tenure  that  expected  between  movers.  relationship  o f , the expected  acqusition.  influence  ex-post  s h o u l d be  holding period.  However,  recent and  m o v e r s . Two c o n s i d e r a t i o n s e x i s t .  have a weaker  of  of the data  a concern  be a d i f f e r e n c e  f o r non-recent  influence time  raises  s h o u l d have a weaker  mobility will  also  i n predicting  will  tenure  characteristic  a n d t h e c u r r e n t l e n g t h o f r e s i d e n c e . The  nature  there  facto  First  current  in predicting  Secondly  expected  t o , our tenure  holding period  expected  mobility  choice  f o r housing  at the  65 It  appears  that  separability  by mover  required  due t o t h e n a t u r e  of the data.  mobility  variable obtained  from  the  likelihood  mobility housing  o f a move w i t h i n  one a s k s  requirements  been  obtained"?  stability  m o b i l i t y asks  i n housing  distinctly  movers, as compared  questions.  should  be more s t r o n g l y  period  associated  Examples in  ownership units Thus be  type  literature  are mobile.  "will  They  a shift  towards  f o r non-recent  negatively  housing  f o r recent  movers, expected  review,  recent  t o move  rental  from  holding  As  empty long  periods  housing  or of  housing  (McCarthy  expected  current  discussed  nesters  to smaller  status  movers, c u r r e n t  correlated with  mobility  decision.  differences exist.  tend  movers  These a r e two  i s why  s t a t u s a t t h e same a d d r e s s  with  current  r e l a t e d to the expected the tenure  o f mover  the extended  widows  with  with  In estimating  For non-recent  This  t o non-recent  directly  "has s t a b i l i t y i n  services continue"?  different  be  expected  deals  two y e a r s .  movers  expected  The  the data  f o r recent  estimating  s t a t u s may  1976).  mobility  could  holding  period. It in  appears  that  the formulation  are  separability  the tenure  nature.  This  be d e s c r i b e d  t o be  of t h e e m p i r i c a l model. These  t h e s i m u l t a n i e t y between  possible Both  two m a j o r c o n c e r n s have  between  m o b i l i t y and tenure, recent  addressed  concerns and the  and non-recent  movers.  a n d t h e d e c i s i o n t o move a r e d i s c r e t e i n  interaction  of the simultaneous  as a multinomial  v a r i a b l e s can  multivariate discrete  66 simultaneous  system.  be  for  accounted  The  separability  through  the  use  the  simultaneous  5.4  MODEL S T R U C T U R E A P P R O A C H E S Analytical  problems Two  are,  restriction are  at  analysis  the  can  to  deal  with  be  used  to  would  simultaneous  model.  simultaniety  but  available Both  three The  the  stage  full  in  regression dependent In to  a  two  with  a  two which  can  within  to  discrete  writing,  to  this  a  to  of  is  nature stage  model  the  a  at  with  proper  a  stage nature.  stage  accounts time  of  for  the  writing,  framework.  have  model  analysis.  packages  A two  probability  the  uses  availability  three  the  approach of  available.  simultaneous  better  is,  logistic  readily  regression  the  regression  residuals  stage  for  approach  joint  problems.  utilize  regression  two  not  probability  account be  handle  software  discrete  linear  stage  linear  the  of  unfortunately  heteroscedaticity However  This  simultaneous  controlled  type  dummy v a r i a b l e s  systems  Logistic  A second approach  only  time  approaches  exist.  designed  mover  framework.  statistical  alternative  of  between  two  logistic  technique  their  is  There  the  model  only may b e stage  and  the  drawbacks. partially some analysis.  probability  for  discrete  variables. three  eliminate  any  model.  However,  system  of  linear  stage  model a c o v a r i a n c e  heteroscedasticity the  available  regressions.  three This  matrix  accounted stage would  is  for  utilized by  regression be  the uses  appropriate  if  a  67  the  dependent v a r i a b l e  Thus the  three  stage  heteroscedasticity  i s continuous  model c o n t r o l s  but  not  the  d e p e n d e n t dummy v a r i a b l e .  As  situation  two  occurs  with  the  rather for the  discrete  mentioned, stage  than  simultaniety  nature the  logistic  discrete.  of  the  opposite approach.  and  68  5.5  SYSTEM STRUCTURE The  can  be  relationship  shown  interaction  to  be  m o d e l l e d from  diagramatically. is  shown  in  The  Figure  MOBILITY  and  AND T E N U R E C H O I C E  MODEL S T R U C T U R E  1 =yes 0=no  DEMOGRAPHIC  1  INFLUENCES 2  /  -life  cycle  -stages,  etc.  TENURE 1 =own 0=rent  mobility  #1  MOVE  Y  available  #1.  Figure JOINT  tenure  the  FINANCIAL INFLUENCES - income -wealth  data  69 The  above model  simultaneous Demographic well  and non-simultaneous influences  as tenure choice.  tenure  tenure  The requires  The  the  a f f e c t only the  o f o f t e n u r e on t h e  and the i n f l u e n c e  only  2  two r e g r e s s i o n s The f i r s t  model  i s straightforward. I t  f o r the f i r s t  stage regressions  s t a g e , and two are required  the unbiased simultaneous influences first  stage uses  regression.  influences.  o f move o n  Y .  a p p l i c a t i o n of t h i s  system  t o move a s  S T A G E L O G I T P R O B A B I L I T Y MODEL  the second.  estimate  1 f  The  a r e shown.  the decision  Financial influences  i s shown b y Y  i s i n d i c a t e d by  5.6 THE TWO  each  a f f e c t both  influences  d e c i s i o n . The s i m u l t a n e o u s i m p a c t  move d e c i s i o n  for  shows t h e r e l a t i o n s h i p o f t h e s y s t e m .  The p u r p o s e  o f Y, a n d Y . 2  a l l of t h e exogenous v a r i a b l e s i n  The e x o g e n o u s v a r i a b l e s  and include  to  come f r o m  a l l t h e demographic of t h i s  stage  endogenous v a r i a b l e s , those determined  and  outside  financial  i s to estimate the within  the system.  70  These  are the simultaneous  These  equations  influencing  c a n be s p e c i f i e d a s  2  = $ + 7iA  2  +  Y, a n d Y . 2  follows:  Y, = a + 0,A + 0 B Y  variables;  7 2  B  + e + e  Where; Y, = p r o b a b i l i t y o f m o v i n g . Y  2  = p r o b a b i l i t y of  A = financial  influences.  B = Demographic e = residual  These  equations  stage  o f a two s t a g e  move o n t e n u r e exogenous 'tenure' the  influence tenure  stage  influences,  error  values.  the standard practice  m o d e l . The endogenous  and v i c e  variables  first  first  follow  ownership.  versa)  i n the first  influence (of  i s determined  of t h e system.  Thus,  f o r the first  by a l l o f t h e  there  i s no  'move' e q u a t i o n , o r move i n  e q u a t i o n . The p r e d i c t e d  a r e , once determined,  used  values  from t h e  i n t h e second  set of  equations. In the  t h e second  probabilty  owning. Only variable either  stage  of moving  the expected  are included  exogenous  t h e r e a r e two e q u a t i o n s , one f o r the other  influences  as independent  or f i r s t  f o r the p r o b a b i l i t y of  stage  on t h e d e p e n d e n t variables.  determined  T h e s e c a n be  endogenous  71  variables. equations  Referring are as  back  to figure  #1, t h e t w o s t a g e  follows:  a + \p,h + \p B +  T =  ^Y, + e  2  M = a + 6,B + 6 Y 2  2  + e  Where:  Tenure  T = probability  of owning.  M = probability  of moving w i t h i n  i sa function  variables, function  of f i n a n c i a l variables,  and t h e p r o b a b i l i t y  of demographic  owning.  These a r e t h e f i n a l  controlling provided  i sa  and the p r o b a b i l i t y of  equations  f o rthe simultaneous  by a two s t a g e  demographic  of moving. Moving  variables  two y e a r s .  of t h e model  influence  after  t o the extent  framework.  5.7 R E C E N T AND NON-RECENT MOVER A N A L Y S I S  I N A TWO S T A G E  MODEL Earlier may  exist.  likely  desired  influence  The  period  this  estimated  thesis  with  groups  two y e a r s  will  holding  period  as a tenure  choice  between e x p e c t e d will  likely  i s the  mobility  and  be weaker a n d  movers.  method o f a n a l y s i s  throughout  two mover  t h e next  expected  The r e l a t i o n s h i p  f o rnon-recent  out that  movers as compared t o  t o be c a p t u r e d  address holding  different  over  f o rrecent  movers. Address  determinant. current  pointed  Expected mobility  be d i f f e r e n t  non-recent  are  discussions  applied  here  i s  f o r a number o f o t h e r  and without  t h e impact  consistent tests.  under  Models  question.  72  These models are where the  then  overall  evaluated.  The  e v a l u a t e d by  e x p l a n a t o r y power  purpose  of  s i g n i f i c a n t ' improvement addition It  of  impact  i s important  mover t y p e they  the  exist  s h o u l d be  Separability variables  of  i n the  groups  have a d i f f e r e n t are  covariance. This  dummy  variables  i n the model.  These d i f f e r e n c e s  the model  covariance is  i s t o see  occurs with  i f a  the  under q u e s t i o n .  whether  differences  If differences final  implies  impact  on  model  the  between  occur  then  specification.  that  evaluated through  is easily  of  independent dependent  a  general  accomplished  variable. analysis  w i t h the  use  of  variables. If  differences  exist,  impacts  as  well  the c o e f f i c i e n t s  If  one  as  on  on  i t i s important  the d i f f e r e n t  how  of  the model  to assess  these  analysis  the e v a l u a t i o n  of  included  of  an  both  expects differences  those  groups  react  the of  between  to the  to account  intercept the the  of  the  independent two  independent  groups  for  equation variables. but  influences,  not then  on  only a  a difference  relationship  is  in  the  shown  intercept in  Figure  Figure GROUP  INTERCEPT  will  occur.  #2.  #2 DIFFERENCES  Independent  Variables  This  type  of  74  The  above  through  figure  the  intercept  coefficients these  two  indicates  value,  are  the  same.  groups  can  be  Recent  In  model  mover-type  dummy v a r i a b l e this  separability  of  the  as  i//=0.  that  type  separability  both  the  one  expected  intercept  Here of  is  differences the  only  model  for  /3 A + /3 B + e n  the  indicates  Rejection  and  the  2  inclusion  independent  groups.  that  If  an  variable two  terms,  the  follows:  requires  hypothesis mover  as  of  type  2  of  of  simple  slope  mover  Y = a + (i^A + /3 B + e  Estimation  significance  the  between  (a+\p) +  Y =  Movers:  this  and  shown  Movers:  Non-Recent  a difference  slope  the  we  this  of  influence. degree  test  the  hypothesis  a The  of  null indicates  important. between  the  coefficients  two of  groups the  in  independent v a r i a b l e s F i g u r e #3  a more c o m p l e x m o d e l  shows t h i s t y p e o f  relationship.  #3  Figure GROUP INTERCEPT AND  Recent  Dependent Variable (probability -of owning o r -moving)  i s required.  SLOPE DIFFERENCES  Movers  Independent The m o d e l f o r t h i s r e l a t i o n s h i p  Movers  Variables  i s as  follows:  Recent Movers: Y = (a+0) + ( 0 i + $ i ) A + ( 0 + S ) B 2  Non-Recent Movers: Y = a + 0,A If  no d i f f e r e n c e  + 0 B + e 2  o c c u r s t h e n c9= ^ i = $ 2 = 0 •  2  + e  76  The  regression  variable has  (Z)  that  a value  movers. that  Two  years as  equation  Y  this  recent  or  less  a  recent  the  the  can  test  at  are  the  significant  a  two  stage  Chi-Squared  determined  results  of  with this  appropriate status. and  result  the  three  can  is  qualifies  added to  the  obtained: + e  between  these  two  hypothesis:  be  tested data  likelihood  tell  two  independent  through  this  us  stage  influences be  preformed.  be  used  stage  models  will  that  tenure  choice  is  the  to  has  affected  between  been  mover  determined then  the  the  by  The  most  Both  test  of  be  identified  can  use  from  differences model  the  considered.  whether  for  can  values  separability  allow  correct  this  Z  non-recent  address  2  the  Here,  2  the  will  0 for  a dummy  e=£i=£ =o  without  tests  is  2  From the  should  hypothesis  hypothesis  5.8  test  significant  cycle  and  model  Once  thesis and  comparing  When  testing  this  statistic.  by  regressions  model,  and  groups.  + /3 B + £ ( Z - B )  0  a  mover  differences  by  incorporates  current  mover.  H : In  two  the  following  whether  model  movere  ia+6) + 0 , A + $ , ( Z « A )  =  groups  for  separates  1 for  of  household  above  One  equation  two  the stage  thesis  family  life  stages.  THE The  THREE  S T A G E MODEL  three  There  is  no  since  this  stage  need will  to be  model  requires  consider considered  only  differences in  the  two  a  short  between stage  discussion. mover  type  analysis.  Only  recent  model.  movers a r e c o n s i d e r e d  This  of course  observations have an  impact  simplify the  from  855 t o a b o u t  further hypothesis  tests.  reduction w i l l  of the r e s u l t s This  Utilizing  a three  r e g r e s s i o n system  the f i n a l  equations,  stage  specified.  These a r e then  t-values  associated with  evaluating  the output,  eliminated.  In this  theoretically yields  important  a final  to understand.  this  analysis will  three  from stage  Only  the t h i r d  analyzed  be u s e d  family l i f e model, w i l l  In  and  This.approach  i n s t r u c t u r e and  the final the thesis  cycle stages. employ  are  variables are  simple  to test  requires  equations  variables.  v a r i a b l e s remain.  compares models, and i n g e n e r a l covariance.  stage  the s i g n i f i c a n t  Once d e v e l o p e d ,  through  by e v a l u a t i n g t h e  insignificant only  only  will  exogenous  the independent  parsimonous model  easy  effect  way  endogenous and  not  but  comes a b o u t  of the model.  be s p e c i f i e d .  the  500. T h i s  stage  viable  specification  variables,  an  the three  t h e number o f  on t h e s i g n i f i c a n c e  simplified  that  reduces  with  model  from  hypothesis  of  These  tests,  with  the p a r t i a l  f-test  that  i s an a n a l y s i s o f  Chapter RESULTS  6.1  THE  OF  TWO S T A G E L O G I T  6.1.1  first  suitable  ANALYSIS  MODEL  essential  model of  important  to  movers  would  allow  then  differences include  tenure  with the  between life  research choice.  maintain  non-recent  to  STATISTICAL  MODEL D E V E L O P M E N T The  was  THE  6  In  additional  these  groups. to  to  develop  development  of  recent  for  it  This  significant  Also,  enable  a  and  dummy v a r i a b l e s .  testing  stages  was  this  separability  later  cycle  task  it  was  important  analysis  of  their  from  model.  impact. Several Analysis that  of  were  highly  that  1. 2. 3. 4. 5. 6.  were  covariance  weakly  preliminary this  the  related  variables  at  variables  to  related the  were  other  stage  include  dependent  independent performed  the  that  the  variables  variable  and  variables.  The  poorly were  in  eliminated  following:  Union membership. Spouse working p a r t time. Spouse not working. P r e s e n c e of n o n - n u c l e a r f a m i l y members. Eldest childs age. ( D i v o r c e d x l e n g t h of m a r i t a l s t a t u s x h e a d ' s age)' (Widowed x l e n g t h o f m a r i t a l s t a t u s x h e a d ' s age)' ( S e p a r a t e d x l e n g t h of m a r i t a l s t a t u s x 5  8.  the  identified  Variables  5  7.  matrix  eliminated  regressions.  early  to  eliminated  78  79  head's Further exclusion due  to  age)  '  5  analysis  of  of  additional  collinearity  a n d weak  variables  of  following  variables  were  model 1.  model  resulted  independent  dependent  of  the  and  the  variables.  relationships  tenure  in  expected  eliminated  during  This  to  was  the  mobility. the  The  process  development:  2. 3. 4.  ( M a r r i e d x l e n g t h of m a r i t a l s t a t u s age)' Spouse working f u l l time. Current address length in years. Age c o h o r t group.  5.  Education  x  head's  5  There final  were  model.  wealth,  only  Tenure  family  1 ) , number  cycle  stages.  (from  the  the from  number these  of  The  first  two  few  move  other  the  in  equations  remaining  as  in  the  a  life  the are  to  values  and  shown  in  (from  and  life  estimate of  future The  move  tenure  stages,  household.  the  of  estimate  household,  cycle  current  in  function  equation,  predicted  between  nine).  probability  final  the  to  variables  children  children  one  specified  stage),  value  of  (levels  was  included  house-change  a  income,  stage  likelihood,  level  the needs, results  Table # 3 .  and  80  T A B L E #3 TWO S T A G E L O G I T M O D E L F I N A L T E N U R E AND MOVE E Q U A T I O N S WITH R E C E N T AND N O N - R E C E N T MOVER SEPARABILITY AND L I F E C Y C L E S T A G E IMPACTS ON T H E INTERCEPT (NO I N T E R G A T I O N OF L I F E C Y C L E S T A G E S WITH WEALTH OR INCOME) TENURE MOVE VARIABLE COEFF. SIGNIF. COEFF. SIGNIF Intercept -.8177 -4.19 .001 5 .1417 MOVE P R E D . -2.52 .0009 N/A N/A TENURE P R E D . N/A N/A -1 .273 .0000 Wealth .00025 N/A N/A .0000 Wealth.R - . 0 0 0 1 7 .0000 N/A N/A Fam.Inc. .005 .5183 N/A N/A Fam.Inc.R .01751 N/A N/A .0599 N.Child.H .9526 .001 4 -.0353 .8361 -.9632 N.Child.H. R . 0 1 76 -.2949 .2779 Hse.Chg. N/A N/A 1.1687 .0000 Hse.Chg,R N/A N/A 0.1703 .9543 Stage.B .2666 .871 5 -.8238 .2515 Stage.B.R .4003 . 8 1 54 .5365 .3865 .7107 Stage.C. .4864 . 1 033 .8664 Stage.C.R .7691 .5866 -.0904 .8862 Stage.D. .0182 .9921 .0762 -1.1283 Stage.D.R .4453 .7749 1.3026 .0978 Stage.F .2858 .9063 -8.4809 Stage.F.R 2.53 .3983 8.4900 Stage.G -.1011 .9729 -6.7704 - 2 . 1 0 5 6 .701 6 Stage.G.R 5.6084 Stage.H - 4 . 6 3 1 7 .7266 1.1112 .2453 Stage.H.R -3.06 .9536 1.9434 . 1 093 -2 log likelihood 311.25 588.03 D e g r e e s of f r e e d o m 613 614 R-Value .773 .459 Number o f o b s e r v a t i o n s 632 631 Prediction Pairs .963 .819 2 3  *  R  N/A  is for = not  recent  movers.  applicable  to  that equation.  S i g n i f i c a n c e l e v e l s a r e n o t r e p o r t e d by t h e software p a c k a g e when s i n g u l a r i t y o f t h e d a t a may e x i s t . B e t a i s r e p o r t e d as b e i n g i n f i n i t e . T h i s o c c u r s when t h e a b s o l u t e v a l u e o f t h e e s t i m a t e i s g r e a t e r t o o r e q u a l t o 5 d i v i d e d by t h e range of t h e c o r r e s p o n d i n g v a r i a b l e , and i t s standard e r r o r i s g r e a t e r t h a n o r e q u a l t o 15 d i v i d e d b y t h e , r a n g e . L i k e l i h o o d r a t i o s t a t i s t i c s are u n a f f e c t e d and v a l i d for t e s t i n g the i m p o r t a n c e of t h e v a r i a b l e w i t h an infinite coef f ic ient. 2 3  81  6.1.2  T E S T I N G THE MOVER T Y P E As  part  of  the  differences  between  undertaken.  As  could  be  through  one  without  The  Chi-Squared  log  of  the  specified The  was  the  model  results  test  value.  time  this  in  the  but  second  of  is  The not  for  movers  methodology the  allowances  statistic  analysis  non-recent  comparison  appropriate  second from  and  indicated  likelihood a  development,  recent  the  IMPACT  above for  model  allowing  for  specification  this  model  mover  calculated above  was  to  type.  from  the  was mover  are  type.  as  follows:  T A B L E #4 TWO S T A G E L O G I T MODEL F I N A L S T A G E T E N U R E AND MOVE E Q U A T I O N S WITH L I F E C Y C L E S T A G E I N T E R C E P T IMPACTS NO MOVER T Y P E ( R E C E N T AND N O N - R E C E N T ) SEPARABILITY (NO L I F E C Y C L E S T A G E WEALTH OR INCOME S L O P E I M P A C T S ) TENURE MOVE VARIABLE COEFF. SIGNIF. COEFF. SIGNIF Intercept -3.291 .0063 -.7999 . 1 454 MOVE P R E D . -2.46 .0007 N/A N/A TENURE P R E D . N/A N/A -1.306 .0000 Wealth .000134 .0000 N/A N/A Fam.Inc. .01113 . 0 1 95 N/A N/A N.Child.H .4661 -.0967 .0091 .4541 Hse.Chg. N/A N/A 1.1729 .0000 Stage.B .7274 .4752 .4521 -.4139 Stage.C. .6921 .4751 -.2554 .6282 Stage.D. -.0497 -.7697 .9599 . 1 658 Stage.F 1.4461 .3557 -1.9528 .1543 Stage.G -.11991 .8962 -1.431 .1435 Stage.H -2.9236 .3116 .0412 .9545 -2 log likelihood 6 0 2 . 81 350.28 Model C h i - S q u a r e 518.09 1 8 5 . 38 622 622 Degrees of freedom .757 R-Value .461 632 Number o f observations 631 Prediction Pairs .954 .808  82  The  d i f f e r e n c e between  approximates  .a C h i - S q u a r e d  test  there  whether  Mover  status  Chi-Squared 39.03. twice  Since the  reported freedom  be  i s a d i f f e r e n c e between  the  two  only  value  d i f f e r e n c e between  comparing output  has  i s e i g h t . The  value  required to  doubt  t h a t mover  been  i s the  variables less  i s 20.09. S i n c e  final  the  tenure  adjusted value  then  For  Chi-Squared the  reject type  test the  this  value  statistic  null  to  models.  models.  is of  lower  degrees  of  number  test  the  for a  99%  greatly  of  degrees  of  confidence exceeds  there  important  The  negative  the  hypothesis,  d i f f e r e n c e s are  used  the  d i f f e r e n c e i n the  one.  values  equations  by  b e t t e r f i t m o d e l . The  test  level  the  likelihood  i s the  for this  statistic.  likelihood can  log f o r the  independent freedom  the  reported  This  i s the value  the  in  is  the  no  tenure  choice. The predict  same t e s t expected  can  question;  assessing  the  value  of  at  hypothesis important  least of  I s mover  likelihood  values  no  applied to  move p r o b a b i l i t y .  following  likelihood  be  of  14.06  95%  current  used  to  the  important  in  d i f f e r e n c e of  confidence  Thus mover  mobility.  address  separability  i s required to  difference.  expected  a  equation  H e r e we  a m o v e ? The  i s 14.78. At  i n e s t i m a t i n g both  determining  type  the  reject type  tenure  level  the  a  null  separability c h o i c e , and  in  is  83 6.1.3 THE  IMPORTANCE  There can  have.  and/or  OF L I F E  a r e two e f f e c t s They c a n e f f e c t  the importance  coefficients. stages  have  that  the l i f e  cycle  stages  the i n t e r c e p t of the  of the independent  I f our n u l l  no e f f e c t  CYCLES  hypothesis  then  only  equation  variable  i s that  one t e s t  may  slope  these be  necessary.  6.1.3.1  T E S T A: I N T E R C E P T AND  S L O P E I M P A C T OF L I F E  CYCLE  STAGE Under  this  considered. effect,  both  I f the null  t h e i n t e r c e p t and slope a r e  hypothesis,  i s not r e j e c t e d then  required. stages  test  possible  impact  on t h e m o d e l  be c o m p a r e d ,  coefficient  influences (Table  tenure  included  choice  therefore  is  than  mobility results  There  a r e some  cycle  impact  two  groups.  due  to the effect  thus  indicating  #6), t h e o t h e r  will  n o t be  i s only this  with  hypothesis,  hypothesis  i s a difference  could  be d u e t o a  could  both  presented.  on t h e i n t e r c e p t , t h u s  of l i f e  with  there  there  their  no i n t e r c e p t o r  mobility with  This  Alternatively,  cycle  o r i n t e r c e p t ? Two  implications i f the null  t h e two m o d e l s .  stage  are not  i s , do l i f e  #5). Concern  rejected. I t implies that  between  slope  one w i t h  (Table  rather  here  i s no  p o w e r when c o n s i d e r i n g  models w i l l  influences  there  further tests  The r e l e v a n t q u e s t i o n  have any e x p l a n a t o r y  that  life  separating the  be a d i f f e r e n c e  c y c l e s on t h e c o e f f i c i e n t s ,  t h e two g r o u p s  react d i f f e r e n t l y .  A  last  84  possibility results these  of  and  that  the  further The  cycle  is  first tests  results  stages  both  from  #5. the  It  from  was  classes  to  less  test  still  statistic to  be  the  from  compared,  the  necessary  number  be  to  slope  regression.  the  be  than same.  will  as  coefficients to  were  exhaustive.  are  if  value #6,  are  to  and The  is  in  variables  an  to  the  used.  now  wealth  shown  allow  nature  of  life  as  some  due  A computation  with  well  eliminate  observations  #5 a n d  The  indicate  specified  intercept  likelihood  Table  significant.  applied.  model  Deletions of  are  performed  the  affecting  insignificant  is  test have  income v a r i a b l e  Table  effects  of  dummy the  Chi-square The  results  presented.  85  T A B L E #5 TWO S T A G E L O G I T M O D E L F I N A L STAGE TENURE EQUATION R E S U L T S I N C L U D I N G I N T E R C E P T , WEALTH AND INCOME S L O P E , FROM L I F E C Y C L E S T A G E S VARIABLE COEFF. SIGNIF I intercept -3.580 .0062 MOVE P R E D . -2.82104 .0006 Wealth .000452 . •Wealth.R -.000408 Wealth.B .000159 Wealth.B.R -.000142 Wealth.C -.000286 Wealth.C.R .000820 Wealth.G .000448 Wealth.G.R -.000248 Wealth.H -.0000657 Wealth.H.R -.000197 .9970 Fam.Inc. -.00105 .9230 .02457 Fam.Inc.R .0069 Fam.Inc.B - . 10805 Fam.Inc.B.R .11783 .00222 Fam.Inc.C .8954 Fam.Inc.C.R -.02746 .2641 Fam.Inc.G -.101714 .06151 Fam.Inc.G.R Fam.Inc.H .9992 -.003276 Fam.Inc.H.R -.02756 .9961 N.Child.H .8095 .0072 N.Chi Id.H.R -.7250 .0522 Stage.B 13.9088 .1695 Stage.C. 1.5509 .4716 Stage.G 1.54230 .9994 Stage.H -7.9359 . Stage.B.R -15.1690 . 1370 -.14137 Stage.C.R .9625 -8.93009 Stage.G.R . Stage.H.R .5752 .9991 259.98 -2 log likelihood 601 D e g r e e s of freedom R-Value .793 632 Number o f observations Prediction Pairs .973 2  4  IMPACTS  S i g n i f i c a n c e l e v e l s a r e n o t r e p o r t e d by t h e software p a c k a g e when s i n g u l a r i t y o f t h e d a t a may e x i s t . B e t a is r e p o r t e d as being i n f i n i t e . T h i s o c c u r s when t h e absolute v a l u e o f t h e e s t i m a t e i s g r e a t e r t o o r e q u a l t o 5 d i v i d e d by the range of the c o r r e s p o n d i n g v a r i a b l e , and i t s standard e r r o r i s g r e a t e r t h a n o r e q u a l t o 15 d i v i d e d b y t h e range. L i k e l i h o o d r a t i o s t a t i s t i c s are u n a f f e c t e d and v a l i d for t e s t i n g t h e i m p o r t a n c e of t h e v a r i a b l e w i t h an infinite coefficient. 2  4  86 T A B L E #6 TWO STAGE L O G I T M O D E L F I N A L STAGE T E N U R E E Q U A T I O N R E S U L T S I N T E R C E P T , WEALTH OR INCOME S L O P E , I M P A C T OF L I F E C Y C L E STAGES 2 5  NO  VARIABLE Intercept MOVE PRED. Wealth Wealth.R Fam.Inc. • Fam.Inc.R N.Child.H N.Child.H.R -2 l o g l i k e l i h o o d Degrees of freedom R-Value Number o f o b s e r v a t i o n s Prediction Pairs  As  c a n be s e e n  compared the  COEFF. -3.533 -2.3761 .000248 -.000168 .003275 .01972 .8302 -.8464 321.51 625 .783 632 .962  m o d e l when o n e a l l o w s  included.  value This  90.30 w h i c h difference  Chi-square  degrees  value  considering important  change  both  for life  of Table  significant.  i s 44.18. Thus,  improvement of  to a Chi-square This  i s computed  t h e 99% life  i n t e r c e p t and slope  when  The  cycle stages are  -2 l o g l i k e l i h o o d  of freedom,  #5  cycle stages.  life  i s related  i n the reported  twenty-three  .0000 .5575 .0000 .0001 .0008  i s a significant  i n c r e a s e s when  i s very  •  from t h e r e s u l t s ,  t o t a b l e #6, t h e r e  likelihood  SIGNIF .0000 .0005  value of from the  values. For  confidence  cycle stages, impacts,  when  are very  i n the tenure .decision.  S i g n i f i c a n c e l e v e l s a r e n o t r e p o r t e d by t h e s o f t w a r e p a c k a g e when s i n g u l a r i t y o f t h e d a t a may e x i s t . B e t a i s r e p o r t e d a s b e i n g i n f i n i t e . T h i s o c c u r s when t h e a b s o l u t e v a l u e o f t h e e s t i m a t e i s g r e a t e r t o o r e q u a l t o 5 d i v i d e d by the range of t h e corresponding v a r i a b l e , and i t s standard e r r o r i s g r e a t e r t h a n o r e q u a l t o 15 d i v i d e d b y t h e r a n g e . L i k e l i h o o d r a t i o s t a t i s t i c s a r e unaffected and v a l i d f o r t e s t i n g the importance of the v a r i a b l e w i t h an i n f i n i t e coefficient. 2 5  87  Having it  concluded  that  i s now p o s s i b l e t o t e s t  slope  coefficient  contribute  life  whether  interaction  to this  cycle stages  are  important  i t s the intercept or  of these  stages  that  conclusion.  6 . 1 . 3 . 2 T E S T B: L I F E  C Y C L E STAGE  I M P A C T ON THE  TENURE  INTERCEPT This life  test  c y c l e stages  equation.  specified  used  with  also  i n the prior  of these  using  tests.  cycle  cycle stage  of family  of the tenure  t h e same  general  The model w i l l  be  i n t e r c e p t terms but not  stages  #3). A second model  terms of l i f e  t h e impact  on t h e i n t e r c e p t v a l u e  the l i f e  interaction  (Table  evaluates  T h i s c a n be d e t e r m i n e d  methodology  the  specificly  with wealth  that excludes with wealth  or  the  income  interaction  and income, and  the intercept influence, i s also estimated  (Table  #6) . The  importance  intercept  of l i f e  cycle stages  i s e a s i l y 'seen by c o m p a r i n g  Table  #3. A C h i - s q u a r e  these  two models  value  i s derived  from  that  i s no d i f f e r e n c e b e t w e e n  additional  the dependent  Chi-square  value  reject  This  with  tests  the null  hypothesis  the models,  or that  v a r i a b l e s added do n o t c o n t r i b u t e t o  explaining  freedom.  #6  the l o g of the  value.  the  value  Table  f o r t h e d i f f e r e n c e between  likelihood there  This  on t h e  v a r i a b l e ' s v a r i a n c e . The  i s 10.26 w i t h  does n o t exceeds  the null  hypothesis  twelve  degrees of  the value  required to  of 21.02 a s s o c i a t e d w i t h a  88  95%  confidence  used  Thus,  to differentiate  intercept It  level.  was  value,  through  groups,  earlier  given  of l i f e  6 . 1 . 3 . 3 T E S T C:  evaluate  the  model  Table  the  final  tenure  of l i f e  considered. which Thus the  #6  and  presented.  #7  equation  effect  results  any  contains  stages.  The  are  must  be  income and  wealth.  WEALTH  AND  TENURE E Q U A T I O N  with  with  choice.  i s the  the  interaction  income and w e a l t h  a r e compared. Table  i s the only  n e i t h e r model  with  be  original  c y c l e stages  this  of only  c y c l e stage  does not c o n s i d e r  f a m i l y type  I N THE  can not  tenure  C Y C L E S T A G E I M P A C T ON  c y c l e stage  This  result  t h e impact  of l i f e  life  cycle stages  LIFE  variables  terms  on t h e i r  i n f l u e n c e . That  INCOME S L O P E C O E F F I C I E N T S To  based  that  t h e above  the i n t e r a c t i o n  interaction  c y c l e stages  to better explain their  determined  important,  life  when t h e  wealth  and  #7  shows  interaction income a r e  d i f f e r e n c e from Table impact  of l i f e  on  cycle  #6 stages.  the i n t e r c e p t i n f l u e n c e of results  f o r Table  #7  are  now  89  T A B L E #7 TWO S T A G E L O G I T M O D E L F I N A L STAGE TENURE EQUATION RESULTS I N C L U D I N G L I F E C Y C L E IMPACTS ON T H E S L O P E OF WEALTH AND INCOME (NO L I F E C Y C L E I N T E R C E P T IMPACTS) 2  VARIABLE Intercept MOVE P R E D . Wealth Wealth.R Wealth.B.R Wealth.C Wealth.C.R Wealth.F Wealth.G Wealth.G.R Wealth.H Wealth.H.R Fam.Inc. Fam.Inc.R Fam.Inc.B Fam.Inc.B.R Fam.Inc,C Fam.Inc.C.R Fam.Inc.F Fam.Inc,G Fam.Inc.G.R Fam.Inc.H Fam.Inc.H.R N.Child.H N.Child.H.R -2 log likelihood Degrees of freedom R-Value  COEFF. -3.328 -2.5363 .000398 -.000351 .000013 -.000231 .000770 .0018144 .000515 -.000288 .0001673 -.000742 -.00219 .02103 -.01312 .01696 .01122 -.02565 -.081029 -.08978 -.04638 -.196084 .05482 .8149 -.6222 263.98 608 .800 Number o f observat ions 632 Prediction Pairs .971  6  SIGNIF. 0004 0024  6024  7838 0159 2752 1 956 0718 0112  0044 0853  S i g n i f i c a n c e l e v e l s a r e n o t r e p o r t e d by t h e software p a c k a g e when s i n g u l a r i t y o f t h e d a t a may e x i s t . B e t a i s r e p o r t e d as b e i n g i n f i n i t e . T h i s o c c u r s when t h e a b s o l u t e v a l u e o f t h e e s t i m a t e i s g r e a t e r t o o r e q u a l t o 5 d i v i d e d by the range of t h e c o r r e s p o n d i n g v a r i a b l e , and i t s standard e r r o r i s g r e a t e r t h a n o r e q u a l t o 15 d i v i d e d b y t h e range. L i k e l i h o o d r a t i o s t a t i s t i c s a r e u n a f f e c t e d and v a l i d for t e s t i n g t h e i m p o r t a n c e of the v a r i a b l e w i t h an infinite coefficient. 2  6  90 The through  results  indicate  the interaction  members o f t h e s e life  variables.  different  cycle stage,  for this  groups,  when  This  i t comes t o t e n u r e  result  i s from  #6 a n d # 7 ) . T h e d e g r e e s  nineteen. at  The v a l u e  to reject  a 99% c o n f i d e n c e  Chi-square This  rejection  their help  value  tenure  choice.  separated based  life  I t has been  stage  i s 36.19  comparison  hypothesis  i s rejected.  models a r e d i f f e r e n t i n  i s , the interaction v a r i a b l e s  u s much  about  shown t h a t h o u s e h o l d s c a n be  cycle position.  H o w e v e r , h o u s e h o l d s may  have  of ownership,  o r income  result  suggests  later  a n a l y s i s and  and t h i s  r e a c t i o n s by l i f e that  f o r ownership vary  be d i s c u s s e d model  test i s  value)  wealth  will  terms  propensities (intercept  different  elaticities  of  initial  probabilities  second  value  choice.  different  This  The  hypothesis  t w o t e s t s , - B a n d C, t e l l  by t h e i r  their  for this  t h e model  these  power. That  e x p l a i n tenure last  the null  their  the interaction  of freedom  the null  us t h a t  occurs  that  choice.  the Chi-square  Since  i s larger  explanatory  These  level.  tells  suggests  t o changes of  57.53 between a model w i t h and w i t h o u t (Table  improvement  a s d e l i n e a t e d by  react differently  income and w e a l t h support  t h a t a major  after  income and  by l i f e  i s due t o  cycle  stage.  wealth  c y c l e stage.  These  presentation of the three  results.  91 6.2 THE T H R E E STAGE L I N E A R P R O B A B I L I T Y MODEL In  certain  appropriate system  f o r the tenure  of equations  advantages. framework of  Thus,  discrete both  model,  of the t h i r d  nature  the tenure three  works  and t h e d e c i s i o n  toward  likelihood  model  system,  two f i n a l  of a two y e a r  t o move like  holding period  household  head's age ( f o r those  i n housing  tenure  c h o i c e , and l i f e  the model p r e d i c t s  the  services  over  cycle  stage  estimates  the probability will  of  move  during  on; the l e n g t h of time i n with the  married), the expected the next  five  years, current  s t a g e s . The second  the probability  i s estimated as a f u n c t i o n  estimated probability  two  ( t h e move  s t a t u s and i t s i n t e r a c t i o n  change  Tenure  handles  applies  equation.  e q u a t i o n s . The f i r s t  i s dependent  current marital  This  the prior  The e x p e c t a t i o n t h a t a h o u s e h o l d  their  variables.  i tproperly  variable.  ownership.  two y e a r s  stage  by n o t c o n t r o l l i n g f o r  w h i l e the second  next  two  nature  regression  that  decision),  the  definite  analysis  dependent  stage,  of t h e dependent  stage  stage  linear  i s offset  simultaneous  offers  (as the p r i o r  because  a  f o r the discrete  f o r continuous  the simultaneity,  The  the  are designed  i s more  stage  three  control  decision  This occurs  the advantages  handles  to  However, t h e a v a i l a b l e  does).  model  the third  does not c o r r e c t l y  techniques  stage  c h o i c e m o d e l . When  i s used  t h e move a n d t e n u r e  analysis  the  ways t h e t h r e e  of ownership of; wealth,  o f a move, a n d l i f e  equation i n tenure.  family cycle  income, stages.  92  Only  recent  movers  model  analysis.  This  limit  the complexity  computation.  Using  the  of t h i s  question  intercept the  recent  recent  study;  Thus,  f o r the three  variables  and t h e degree of  movers  do l i f e  allows  a fast  c y c l e stages  effect  on w e a l t h  the results  stage  t h e two s t a g e  model  focus  on  have an  and income i n  d i s c u s s e d and  deal  t-values.  dependent variables.  matrix  v a r i a b l e s were  relationships  that  excluded  The c o r r e l a t i o n  independent  variables.  analysis,  specifically  several  and t r a n s f o r m a t i o n s of these  t h e m o d e l . Many w e r e  just  stage  with  movers.  As w i t h  in  o f t h e model  only  equation?  i n the three  d e l i n e a t i o n was i n c o r p o r a t e d s o a s t o  and/or i n t e r a c t i o n  tenure  presented  are considered  result  This their  d o e s n o t mean t h a t  significant  tested  insignificant t h a t many o f t h e  related.  Such  f o r the independent  they  a r e not  to explain the variance  v a r i a b l e s was a c c o u n t e d Only  indicated  i n low t - v a l u e s  ability  v a r i a b l e s were  f o r having  linearly  independent  f o r by o t h e r  independent  important, of the independent  v a r i a b l e s were  retained. In  the f i r s t  decision, marital  that  estimates  a g r o u p o f v a r i a b l e s were  the interaction  significant.  This  model. The square  result root  i n f l u e n c e . Of  i n f l u e n c e f o r those  was a l s o f o u n d  This  married  i n t h e two  f o r the interaction  h e a d ' s a g e was u s e d .  t h e move  t e s t e d f o r the length of  s t a t u s and head's age i n t e r a c t i o n  group only  and  equation,  of years  this was  stage married  follows the theoretical  93  approach  that  decreasing status and  or  tenure  the  rate age.  propensity  with The  increases  results  equation  to  are  of  shown  move in  either  this in  decreases length  model  table  at  for  of  both  a marital the  move  #8.  T A B L E #8 T H R E E S T A G E MODEL R E S U L T S F I N A L S T A G E MOVE AND T E N U R E E Q U A T I O N S WITH L I F E C Y C L E S T A G E I N T E R C E P T IMPACT (NO S L O P E I N T E R A C T I O N OF L I F E C Y C L E S WITH WEALTH AND INCOME) VARIABLE COEFF. SIGNIF. T-RATIO MOVE E Q U A T I O N Intercept 0.5225 0.2821 1 .078 Hse. Chg. 0.2167 5.829 0.0001 Tenure Pred. -0.1015 -0.898 0.3701 Marr ied -3.307 -0.02078 0.0011 StageA -.0159 -0.0341 0.9728 StageB -.0890 - 0 . 1834 0.8546 -.1007 StageC -0.2069 0.8362 StageD .04946 0.9211 0.0991 StageE .04118 0.0755 0.9399 StageG -.4210 -2.005 0.0459 StageH -.4056 -2.206 0.0282 TENURE E Q U A T I O N Intercept 0.3195 0.72 0.4713 Wealth 0.000005819 6.42 0.0001 Fam. Inc. 0.002678 4.05 0.0001 Move P r e d . -0.5989 -5.408 0.0001 StageA -.0629 -.148 0.8820 StageB -.1128 -.2576 0.7986 StageC -.0764 -.1751 0.8611 StageD -.1814 -.4153 0.6783 StageE 0.0189 .0389 0.9690 StageG -.1823 .3437 -.9484 StageH -.3099 -1.7867 0.0751 SYSTEM S T A T I S T I C S R-Square Value .3538 Degrees of Freedom 554 Number o f o b s e r v a t i o n s 263 Mean S q u a r e E r r o r 1.48737  This  completes  the  simultaneous  regression  choice  model  that  (Table  #3).  model  discussion model.  corresponds  of  This to  the  the  is  the  basic  three  basic  earlier  basic  stage  tenure two  stage  94 6.2.1  L I F E C Y C L E S T A G E S AND THE T E N U R E D E C I S I O N  I N THE  T H R E E S T A G E MODEL In tenure were  order t o test decision  performed.  stage model any  impact  f o rl i f e  within These  cycle  i m p a c t s on t h e  t h e t h r e e s t a g e model follow  t h e format  presented e a r l i e r .  used  The f i r s t  a t a l l . T h i s c a n be f r o m  an  influence  o r from an i n t e r a c t i o n  variables  o f income o r w e a l t h . I f t h e r e i s an  both  intercept  then  tests  f o r t h e two  test  either  with  three  checks f o r intercept  t h e independent  and slope i n f l u e n c e s  will  impact be  explored.  6.2.1.1  T E S T A : L I F E C Y C L E S T A G E I M P A C T ON THE T E N U R E  I N T E R C E P T , WEALTH AND INCOME S L O P E , The on  first  f o r any impact  the tenure decision,  models. are  In the first  included  variables  slope  contain  First,  only  cycle  the results  ( T a b l e #9) l i f e  an i n t e r a c t i o n  the intercept influence  stages  of two  cycle  independent  of t h e independent  comparison a life  intercept  terms  of l i f e  stages  dummy  are included.  affecting the variables of  and income.  The  Both  model  affect  coefficients  wealth  compares  i n two ways.  which  Second, w i t h  is  test,  COEFFICIENTS  cycle  model  f o rt h e f i r s t  stage  influence  test  on t h e t e n u r e  o r t h e s l o p e o f w e a l t h o r income  t h e independent  dummy v a r i a b l e s  a r e e x c l u d e d . The c o m p a r i s o n  by means o f a p a r t i a l  f-test.  does n o t  (Table #10).  and the interaction  o f t h e s e two models  That  i s ,a f - v a l u e i s  95  estimated that The  from  results null  the  have  the  the  If  we  can  an  null  this  both.  An  there  are  reveals behave  the  tests  indicates  that  of  the  life  are life first  additional the  model.  is  done  level  the  cycle  does or  differences. behave  then  statistic  independent  This  influence  change  secondary  on  reject  test  groups  R-squared  independent The  by  of  variables.  goal  is  to  exceeding  significance,  hypothesis.  influence  differently  elasticities  results  that  intercept  if  to  first  group  the  a desired null  able  intercept  that  influence  the  the  additional  is  for  with are  of  hypothesis.  conclude  However, is  the  no  f-value,  associated  one  from  change  hypothesis  variables reject  the  it  from  is  one  performed  null stages  not a  hypothesis are  indicate  interaction  indicates The  important. whether  interaction  likely  that  there  influence  indicates  differently.  then  If  or  whether  influence the  groups  their  group  to  the  next.  These  only  if  the  first  test  cycle  stages  have  test  follow  in  an  Table  influence. #9 a n d  The  #10.  96  T A B L E #9 T H R E E S T A G E MODEL R E S U L T S ( N O N - R E C E N T MOVERS) F I N A L S T A G E MOVE AND TENURE E Q U A T I O N S WITH T E N U R E E Q U A T I O N L I F E C Y C L E S T A G E I N T E R C E P T , WEALTH AND INCOME S L O P E , I M P A C T S VARIABLE COEFF. T - RATIO SIGNIF. MOVE E Q U A T I O N Intercept 0 . 5202 1 . 073 0 .2841 Hse. Chg. 0 . 2151 5 . 786 0 .0001 Tenure Pred. - 0 .1004 - 0 .888 0 .3752 Marr ied - 0 .02143 - 3 .413 0 .0007 StageA • 01 176 - 0 .0252 0 .9800 StageB 0796 - 0 . 1 642 0 .8697 StageC - 0 .1838 • 0895 0 .8543 StageD .06518 0 . 1 306 0 .9862 StageE .05327 0 . 0976 0 .9223 StageG -1 .999 • 41 98 0 .0465 StageH - 2 .207 • 4059 0 .0281 TENURE EQUATION Intercept 0 . 03656 0 . 058 0 .9536 Wealth 0 . 00000459 0 . 0883 0 .9297 Fam. Inc. 0 . 002647 0 . 4537 0 .6504 Move P r e d . - 0 .5595 - 4 .882 0 .0001 Wealth.A 0 . 0000137 0 . 3731 0 .7094 Wealth.B 0 . 0000042 0 . 0806 0 .9358 Wealth.C 0 . 0000054 0 . 0883 0 . 1 034 Wealth.D • 0000011 021 6 0 .9828 Wealth.E 0 . 0000196 0 . 3720 0 .7102 Wealth.G 0 . 0000026 0 . 0490 0 .9609 Wealth.H 0000132 • 2452 0 .8065 Fam.Inc.A • 00326 • 4111 0 .6813 Fam.Inc.B 0 . 00186 0 . 3122 0 .7522 Fam.Inc.C 001 5 • 2535 0 .8001 Fam.Inc.D 001 57 • 2624 0 .7932 Fam.Inc.F 0 . 005949 1. 8898 0 .0599 Fam.Inc.G 0 . 004455 0 . 5549 0 .5795 Fam.Inc.H 0 . 000724 0 . 1 1 49 0 .9086 StageA 0 . 4048 0 . 4912 0 .6237 StageB 21 92 • 1 431 0 .8266 StageC 0 . 3393 0 . 5294 0 .5970 StageD ' 0 . 3633 0 . 5525 0 .581 1 StageE 0. 0 StageG • 4968 * 6629 • 5080 StageH • 2634 • 4048 0 .6860 SYSTEM S T A T I S T I C S R-Square Value .3824 Degrees of Freedom 541 Number o f o b s e r v a t i o n s 263 Mean S q u a r e E r r o r 1.50853  97  T A B L E #10 T H R E E S T A G E MODEL R E S U L T S ( N O N - R E C E N T MOVERS) F I N A L S T A G E MOVE AND T E N U R E E Q U A T I O N S NO T E N U R E E Q U A T I O N L I F E C Y C L E S T A G E INTERCEPT, WEALTH AND INCOME S L O P E , IMPACTS VARIABLE COEFF. T - RATIO SIGNIF. MOVE E Q U A T I O N Intercept 0.4409 0 . 9518 0 .3420 Hse. Chg. 0.2322 6 . 204 0 .0001 Tenure Pred. -0.0587 - 0 .526 0 .5987 Married -0.02287 - 3 .642 0 .0003 StageA 0.02855 0 . 0639 0 .9491 StageB -.0248 - 0 .0534 0 .9574 StageC -.0497 - 0 . 1 067 0 .9151 StageD .15707 0 . 3282 0 .7430 StageE .06115 0 . 1171 0 .9069 StageG -.3746 -1 .862 0 .0636 StageH -1 .733 -.3054 0 .0841 TENURE EQUATION Intercept 0.11255 1 . 1 42 0 .2542 Wealth 0.00000594 6 . 7582 0 .0001 Fam. Inc. 0.002998 4 . 7877 0 .0001 Move P r e d . -0.5074 - 5 .068 0 .0001 SYSTEM S T A T I S T I C S R-Square Value .3384 Degrees of Freedom 561 Number o f o b s e r v a t i o n s 263 Mean S q u a r e E r r o r 1.33303  The  partial  R-squared  values,  independent equations the  2 7  system  See  (1983)  Ott p.  f-test number  variables  are  is  of  computed  of  466-477.  within  values  and H i l d e b r a n d ,  observations,  each m o d e l .  simultaneous  R-squared  using  are  the  used,  Statistical  2 7  the  model  and  the  Since three and  the  number system  stage  with  Thinking  of of  framework  two  for  Managers  98  equations, freedom  twice  f o r the system  observations. from  t h e number  the  The  of o b s e r v a t i o n s .  i s a l s o based  calculation  following  f  of the  on  The  twice  f-value  degrees  of  t h e number  of  can  be  derived  equation:  =  (R  - R  2 c  2 r  )  /  (k -  g)  O  - R  = R  2  value  from the complete  = R  2  value  from  2 c  )  /  {n -  (k +  1)}  Where: R  2 c  R ^ 2  k  = total  g  = number o f p r e d i c t o r s w i t h not  (k-g)=  Degrees Degrees  hypothesized number  models  is  1.93.  D.F.2=542. null  The  the p a r t i a l  i s improved  test  The  f-test  i s 1.88.  additional  v a r i a b l e s do  the  Since  The  t o the above  test  freedom  The  (D.F.)  t o be null  not add  exceeds  will  exceeded  hypothesis  the n u l l  models  and  to reject i s that  to the explanatory  1.88  the  for the  i s D.F. ,=20  two  indicate  through the a d d i t i o n of  resultant f-value  statistic  1.93  zero.  :  degrees of  hypothesis  model.  t o be  cofficients  2  in question. The  zero.  of p r e d i c t o r s w i t h  a n a l y s i s of c o v a r i a n c e .  t h e model  variables  t o be  coefficients  Freedom =(k-g) Freedom =n-(k+1)  a p p l i c a t i o n of  i s an  whether  of of  model,  number o f p r e d i c t o r s ,  hypothesized  The  the reduced  model.  the  the  power  hypothesis  is  of  99 rejected.  The l e v e l  Thus  cycle  life  choice. cycle  Further  stages  model,  or  of s i g n i f i c a n c e  stages tests  affect  for this  do c o n t r i b u t e are required  test  to explaining t o determine  the intercept,  i s 99%. tenure  whether  the c o e f f i c i e n t s  life  of the  both.  6 . 2 . 1 . 2 T E S T B: L I F E C Y C L E S T A G E EQUATION In effect  THE  TENURE  INTERCEPT order  t o determine  i f there  two m o d e l s a r e r e q u i r e d .  cycle  stages  other  model  (Table  I M P A C T S ON  a s dummy v a r i a b l e s will  be t o t a l l y  #10). Both  of these  i s an  One m o d e l (Table  will  have  life  #8), w h i l e t h e  independent model  intercept  of these  results  have  stages  been  presented. The  test  f o r group d i f f e r e n c e  between  life  f-test.  Using  f-value  comparing  freedom  f o r the test  significance 95%  level  the  null  However,  of  i s done  the results  since  at slightly  #8 a n d #10 t h e  i s 1.8895.  statistic  t h e model  a t these  depends  lower  value  levels  as the t e s t  between  b u t i s weak.  the partial  The d e g r e e s o f 2  rejection  as w e l l  choice  a r e D . F . ^ 7 a n d D.F. = 5 5 5 . A t a 9 9 %  the test  hypothesis  through  of Table  the models  level  a difference  exists  stages  2.01. G i v e n  significance possible  cycle  of tenure  i s 2.64, and f o r a one c a n n o t  of  significance.  on t h e l e v e l value,  significance  reject  of  rejection level.  groups based of l i f e  may  Support cycles  be  100 6.2.1.3  T E S T C:  LIFE  SLOPE COEFFICIENTS The q u e s t i o n interaction wealth  I N THE  TENURE  t o address  effect  of l i f e  and income. Here,  various  variables  coefficients  exist  variables  may  difference  deals with the  will  with show  coefficients  t o changes  a l s o vary  i n these  household i f the  of the  the  response  independent  by g r o u p . To t e s t  for this  two m o d e l s a r e r e q u i r e d . A m o d e l c o n t a i n i n g  cycle  (Table  now  INCOME  EQUATION  the e l a s t i c i t i e s ,  terms of wealth  with  WEALTH AND  c y c l e stages  the test  interaction stage  ON  in question. If different  then  of households  without  now  groups have d i f f e r e n t  independent  rate,  CYCLE IMPACTS  #11) w i l l  the interaction  the interaction presented  and income  be c o m p a r e d  i n f l u e n c e (Table  i n f l u e n c e has been  i n Table  f o r each  #11.  life  t o a model #10). A estimated  model and i s  101  T A B L E #11 T H R E E S T A G E MODEL R E S U L T S ( N O N - R E C E N T MOVERS) F I N A L S T A G E MOVE AND TENURE E Q U A T I O N R E S U L T S I N C L U D I N G L I F E C Y C L E S T A G E I N T E R A C T I O N WITH WEALTH AND INCOME (NO L I F E C Y C L E S T A G E I N T E R C E P T I M P A C T ) VARIABLE COEFF. T-RATIO SIGNIF. MOVE E Q U A T I O N • Intercept 1 .037 0.5031 0.3006 Hse. Chg. 0.2133 5.738 0.0001 Tenure Pred. -0.0996 -0.881 0.3789 Marr i e d -0.02147 -3.409 0.0007 StageA 0.00457 0.0098 0.9922 StageB -.0512 -0.1057 0.9159 StageC -.0748 -0.1539 0.8778 StageD .08125 0.8707 0.1629 StageE .08609 0.1587 0.8744 StageG -.4025 -1.929 0.0547 StageH -.3987 - 2 . 184 0.0298 TENURE EQUATION Intercept 0.24306 2.342 0.0199 Wealth 0.00000207 0.0405 0.9677 Fam. Inc. 0.000974 0.3853 0.7003 Move P r e d . -0.5678 -5.169 0.0001 Wealth.A 0.0000125 0.3435 0.7315 Wealth.B 0.0000079 0.1540 0.8777 Wealth.C 0.0000071 0.1392 0.8894 Wealth.D -.0000012 -.0231 0.9816 Wealth.E 0.0000231 0.4462 0.6558 Wealth.G 0.0000052 0.1027 0.9183 Wealth.H -.0000087 -.1661 0.8661 Fam.Inc.A 0.00042 0.1565 0.8757 Fam.Inc.B 0.00114 0.4691 0.6394 Fam.Inc.C 0.0012 0.4799 0.6317 Fam.Inc,D 0.00121 0.4910 0.6238 Fam.Inc.F 0.006144 1.9880 0.0478 Fam.Inc.G -.000781 -.3518 0.7252 Fam.Inc.H -.001822 -1.005 0.3155 SYSTEM S T A T I S T I C S R-Square Value .3764 Degrees of Freedom 547 Number o f o b s e r v a t i o n s 263 Mean S q u a r e E r r o r 1.47438  Comparison the  interaction  and  income  This  is  exceeds  of  the  above  influence  important. the  value  of  of The 2.1  Tables life  #10  cycle  f-value that  is  for  and  #11  stages the  shows with  test  required  to  is  that  wealth 2.389.  reject  the  1 02  null  hypothesis  a t a 99% c o n f i d e n c e  hypothesis,  as with  independent  values  hypothesis differ  prior  that  cycle  cycle are  suggest  considering  life  different.  There  'between'  groups,  on  each  intercept  based  results  cycle  stage  and s t r o n g Between  t e s t s , while  groups, of  i s used. choice  When i s  differences  evidence  of  differences  group d i f f e r e n c e s within  coefficient evaluations. within  life  conclusions  tenure  differences  by t h e two model  of  These  stage model  i s weak e v i d e n c e  (between v e r s e s  supported  this  elasticities  f o r the impact  two c o n c l u s i o n s .  group.  on s l o p e  The r e j e c t i o n o f  CONCLUSIONS  s i m i l a r i f a two o r t h r e e  'within'  null  the additional  income and w e a l t h  r e s u l t s of the t e s t s  stages  The  stage.  6.2.2 A N A L Y T I C A L The  i s that  h a v e no i n f l u e n c e .  suggests  by l i f e  tests,  level.  groups a r e  Both  differences)  frameworks and  a r e based  of these are strongly  relevant  tests. Also  further  tests  is  a change  of  t h e move e q u a t i o n .  and  of  i n the s i g n i f i c a n c e of wealth  properly  tenure life  cycle  When  that  with  t h e move e q u a t i o n  tends  stage  to decreases.  impact  on t e n u r e  of expected m o b i l i t y .  socio-demographic  variables  Also  This  partially  there  inclusion  i s included  s p e c i f i e d the importance of wealth  decision  inclusion  ( n o t shown) i n d i c a t e  on t h e .  the importance  decreases  with the  suggests  that  affect  tenure  103  choice  i n d i r e c t l y by a f f e c t i n g  period.  F i n a l l y , the correct  the expected  holding  model s p e c i f i c a t i o n f o r  tenure choice operates through a simultaneous relationship  between e x p e c t e d h o l d i n g p e r i o d ( o r  expected mobility) are  and tenure c h o i c e . L i f e c y c l e  stages  i m p o r t a n t b o t h i n d e t e r m i n i n g m o b i l i t y , and  household reactions  t o income a n d w e a l t h f o r  homeownership. T h i s s u g g e s t s that may e x i s t  f o rthe various l i f e  different  cycle  stage  elasticities groups.  6.2.2.1 INCOME AND WEALTH E L A S T I C I T I E S Income a n d w e a l t h e l a s t i c i t i e s g r o u p s c a n be c a l c u l a t e d  f o rthe various  from t h e f i t t e d model. Judge  e t . a l . (1982) d i s c u s s e s t h e r e l a t i o n s h i p independent v a r i a b l e dependent v a r i a b l e al.  between  c o e f f i c i e n t s and changes of t h e  probability.  I n t h i s regard Judge e t .  (1982:522) n o t e s : " E s t i m a t e d c o e f f i c i e n t s do n o t i n d i c a t e t h e i n c r e a s e i n t h e p r o b a b i l i t y o f an event o c c u r i n g , g i v e n a one u n i t i n c r e a s e i n t h e corresponding independent v a r i a b l e . Rather, the c o e f f i c i e n t s r e f l e c t t h e e f f e c t o f a change i n an i n d e p e n d e n t v a r i a b l e on l n { P . / ( 1 - P . ) } f o r t h e l o g i t m o d e l . The amount of t h e i n c r e a s e i n p r o b a b i l i t y d e p e n d s on t h e o r i g i n a l p r o b a b i l i t y a n d t h u s on t h e i n i t i a l v a l u e s of a l l t h e independent v a r i a b l e s and their coefficients."  The J u d g e e t . a l . f o r m u l a t i o n in  p r o b a b i l i t y of a s u c c e s s f u l  variable  f o r e s t i m a t i n g t h e change discrete  choice  dependent  ( s u c h a s o w n e r s h i p ) f r o m a c h a n g e o f an  independent v a r i a b l e  follows:  104  Coeff.  • exp(-IVar.  {1 + e x p ( - L V a r - j  x  Coeff.)  x Coeff^)}  In t h i s c a l c u l a t i o n of  m o v e r s . The  cofficient  d e t e r m i n e d from the wealth  and  interest  the wealth  of  Stage-A  ' j ' f o r t h i s group i s  regression equation  is multiplied sum  coefficients  p r e d i c t e d value of  by  the  negative  o f a l l v a r i a b l e s and  that observation. This  negative  ' j ' i s the v a r i a b l e  for  t h e a p p l i c a b l e dummy v a r i a b l e s . T h i s v a r i a b l e  exponent of the for  Coefficient  i n t e r e s t . For example, c o n s i d e r  recent  of  2  f o r an  is similar  of,the coefficients  to estimating  o b s e r v a t i o n , and  taking  i t s exponent v a l u e . A s i m i l a r  exists  i n t h e d e n o m i n a t o r . The  value,  f o r the c o e f f i c i e n t  result  the  calculation  i s an  in question,  a  elasticity  for each  observat ion. The slightly  elasticity different  the e l a s t i c i t y probability  v a l u e , as J u d g e s u g g e s t s ,  from the normal i n t r e p r e t a t i o n .  value  represents  t h e change i n  of o w n e r s h i p f r o m t h e c u r r e n t  For  example i f the c u r r e n t p r o b a b i l i t y  and  the wealth  percent  elasticity  i n c r e a s e of w e a l t h  of the  current probability  o r may  not  there  is  i m p a c t on  was  .1%  will  the  probability.  i s 80%  (or  result  f r o m 80%  of t h a t  .8)  (or .001), then a in a  .1%  t o 80.08%. T h i s  f o r m of t e n u r e  one  increase  ownership. I f ownership occurs  i s a 50% p r o b a b i l i t y  Here  may when  then,  105 in  the  above example,  ownership  rate.  o w n e r s h i p was have a not  large  confuse  there  However,  49.7%  the  i f the  then  impact  on  i s no  change  the  current probability  s m a l l changes  ownership  probability  in  of  rates.  wealth  Thus,  elasticities  will  one  with  of  should  ownership  rates. Elasticities life  for  income and  c y c l e g r o u p s have been e s t i m a t e d .  derived  from a v a r i a t i o n  The  stage  two  separation life  logit  of  specified  this  effect.  observations single  grouped are  equation actual  Due  discussed of  with  E  #12.  The  earlier  are  models.  allowed  for  status.  income and  the  Family  wealth  was  weak s i g n i f i c a n c e  H  number  (empty  nesters  households.  and  the  These  were Judge  Summary m e a s u r e s are  of  of  observations  elasticities  elasticities  various  estimates  mover  these  coefficients above.  the  The  This  low  through  'other'  of  for intercept difference  earlier  households)  estimated  vector  used.  relatively  under  the  non-recent  the  i n stages  parent  of  allowance  to a  in Table  the  one  interaction  given  together  shown  using  and  H o w e v e r , no  were  of  m o d e l was  recent  c y c l e stage  included.  all  wealth  presented  for  and were results  calculated (1982) the  in table  #13. Note values The  #13  f o r a l l members o f  mean  group.  that Table  i s the  The  is a  summary o f  a particular  average e l a s t i c i t y  reported  standard  elasticity  life  cycle  stage.  f o r the a p p l i c a b l e  deviation refers  to  the  1 06  distribution does  not  of  refer  elasticity to  the  values  significance  of  the  of  group  that  and  thus  elasticity.  T A B L E #12 TWO S T A G E L O G I T M O D E L F I N A L STAGE TENURE EQUATION RESULTS I N C L U D I N G L I F E C Y C L E I M P A C T S ON THE S L O P E OF WEALTH INCOME (NO L I F E C Y C L E I N T E R C E P T IMPACTS) 2 8  VARIABLE Intercept MOVE P R E D . Wealth Wealth.R Wealth.A Wealth.A.R Wealth.B Wealth.B.R Wealth.C Wealth.C.R Wealth.0 Wealth.H.R Fam.Inc. Fam.Inc.R Fam.Inc.A Fam.Inc.A.R Fam;Inc.B Fam.Inc.B.R Fam.Inc.C Fam.Inc.C.R Fam.Inc.0 Fam.Inc.O.R N.Child.H N.Child.H.R -2 log likelihood Degrees of freedom R-Value Number o f observations Prediction Pairs  COEFF. -3.288 -2.5395 .0004958 -.000454 .001302 -.001861 -.0002034 -.0002237 -.0003294 .000859 -.00016338 .00115117 -.0067619 .0284262 -.1794357 .15138138 .00073145 -.000026184 .01524771 -.03095552 .01416641 -.01915947 .84378 -.7926 262.85 609 .803 632 .972  AND  SIGNIF .0004 .0025  .6024  .4864 .0046  .9639 .9997 .0376 .0044 .2485 .6836 .0056 .0393  S i g n i f i c a n c e l e v e l s a r e n o t r e p o r t e d by t h e software p a c k a g e when s i n g u l a r i t y o f t h e d a t a may e x i s t . B e t a i s reported as being i n f i n i t e . T h i s o c c u r s when t h e a b s o l u t e v a l u e of t h e e s t i m a t e i s g r e a t e r t o or e q u a l t o 5 d i v i d e d by the range of the c o r r e s p o n d i n g v a r i a b l e , and i t s standard e r r o r i s g r e a t e r t h a n o r e q u a l t o 15 d i v i d e d b y t h e r a n g e . L i k e l i h o o d r a t i o s t a t i s t i c s are u n a f f e c t e d and v a l i d for t e s t i n g the i m p o r t a n c e of t h e v a r i a b l e w i t h an infinite coefficient. 2  8  LIFE  CYCLE STAGE C O E F F I C I E N T S FROM A B O V E R E S U L T S WEALTH.A • 00179854 - .00051677 WEALTH.A.R WEALTH.B • 00029238 WEALTH.B.R 00006179 WEALTH.C 00016642 WEALTH.C.R • 00057207 WEALTH.D • 00049582 WEALTH.D.R • 0000415 WEALTH.0 00033244 WEALTH.0.R • 00102929 - .18619757 F.INC.A - .00638996 F.INC.A.R - .00603044 F.INC.B F.INC.B.R « 02233395 F.INC.C • 00848582 F.INC.C.R • 00595653 F.INC.D -.00676189 F.INC.D.R • 02166434 F.INC.O • 00740452 F.INC.O.R • 01667128  108  T A B L E #13 WEALTH AND INCOME PROBABILITY ELASTICITY ESTIMATES FOR V A R I O U S L I F E C Y C L E S T A G E S WEALTH INCOME MEAN STD. MEAN STD. STAGE.A .000117595 .0001520 -.0060871 .0078674 STAGE.A.R -.00003379 .00004367 -.0002089 .00027 STAGE.B .0000191168 .00002471 -.00019715 .0002548 STAGE.B.R .00000404 .0000052216 .000730135 .0009437 STAGE.C .000010881 .0000140635 .000277416 .0005855 STAGE.C.R .000037430 .00004834 .00027742 .00025168 STAGE.D .000032418 .0000419 -.00022106 .00028571 STAGE.D.R .0000027134 .00000351 .00070824 .0009154 STAGE.O .000021736 .000028093 .00024207 .00031286 STAGE.O.R .000067285 .000086981 .00054501 .0007044  STD  = Standard d e v i a t i o n of c a l c u l a t e d values around t h e i r mean.  MEAN = T h e  mean  elasticity refers  values  to  the  households The first  elasticity  however,  changes wealth  over  current  family  of  single,  be  unreasonable  to  expect  to  a modest  If,  for  $10,000 recent  example, the  the  the  movers  would  be  arrival  of  children,  $30,000  is  plausible.  ownership movers.  probability  cycle  their  When c h i l d r e n  of  ownership -3.38%.  This  #12  This  value  from  the  .1212% and  small  considers stage.  the  to  wealth  increase  was  from  probability Stage-B  increase in  an  (300% x before  the  It  Stage-B,  of  would  not  from  nill  marriage. $1,000  change up  the  wealth  .000404%) enter  to  lor  to  increase  they  at  financial  Consider  households.  During an  appear  entered  results  arrive  group.  wealth  they  Stage-C,  probability  probability  one  Stage-A,  time  of  in  all  level.  when  increase  associated  that  Table  life  position  sum by  in  changes  from  for  change  values  this  each  elasticity  elasticity  to  of for  recent  school  a  109 doubling  of  wealth  probability  of  when c h i l d r e n over by  this  l e a d s t o an  ownership. are  The  increase of next  the  probability  .027%. T h e s e v a l u e s a r e  not  the  and  threshold requirements  pattern. recent  influence  considered  in probability  elasticities  are a l l p o s i t i v e  Stage-A.  are  Four  negative. This  movers),  wealth  Stage-B,  low  t h a t can single  may  are  be  mobile. of  to  wealth  levels.  Due  to threshold  desiring  t o own  may  prefer  current levels  wealth are  and  income  established.  to  factors  and  the  factor. large  are  desire  expected  requirements,  rent,  increases, until  These  occurs  financial  Stage-A households  households  a  The  Alternatively,  low  than  reflect  mobility  e q u i t y may  effect  the  i s less  influences. have  and  hypothesized.  households,  the  (recent  opposite generally  traditionally  overpower  for  A l s o when  stage  o n l y be  of  except  income  These e l a s t i c i t i e s  accumulation  households  mobility  the  ten  Stage-D. a  can  interesting  i n c l u d e s Stage-A  and  elasticities.  Stage-A,  traditional  the  f o r a l l movers of  f o r reasons  During  of  income  very  The  behaviour  for  Since  have an  movers of  increases  impact  current probability.  f o r r e c e n t movers then  Single  their  elasticities  income e l a s t i c i t y  the  doubles  caluclated  non-recent  for  wealth  occurs  ownership  but  are  the  stage  change.  wealth  on  of  tenure  elasticities  that  of  i n homeownership s m a l l changes  have a major The  household's  large  d e p e n d s on  important  cycle  in school. I f household  p e r i o d then  wealth  life  .374%  in light  of  threshold equity  seem a p p l i c a b l e  to  the  1 10  negative  income  The  only  elasticity Household  elasticities.  other  negative  of Stage-Di  This  income n o r m a l l y  elasticity is difficult  peaks during  return  o f t h e s p o u s e t o t h e work  demand  f o r housing  are  i n school rooms.  factors  may  survey  may  The the  clear  have  elasticity  The  rate.  and  The  For  recent there  i n three movers  This  elasticities.  was  expected.  value  seems o u t  move  stability  but at decreasing  elasticities, of f i v e  i s a negligible  recent  cases.  have a h i g h e r  stages  values.  As h o u s e h o l d s  the consumption-investment  f o r the various  nature  of  housing  rates. total  group and  i s not t o t a l l y movers  have a  i n four  of f i v e  d i f f e r e n c e i n the last  case.  clear. lower  For income e l a s t i c i t y  value  one  wealth  at a  locational  is  However,  positive one  with  result  occurs  p a t t e r n of d i f f e r e n c e s between  movers  identified.  i s positive  of e l a s t i c i t i e s  cycle stages  important  the wealth  value  This  Other  of t h e  n o t been  f o r the strong  trend  children  than  t o the p a t t e r n of a l l the other  positive  becomes more  recent  allowance  the l i f e  increases,  have  f o r the Stage-A group. This  general  through  a t the time  the  highest  i s more l o g i c a l .  cycle stages.  income and w e a l t h  compared  decreasing  these  the l i f e  with  the  private rather  elasticity  and  stage  t r e n d of the e l a s t i c i t i e s  through  f o r both  place  occurred  this  i n Stage-D while  influenced the data  general  h a s t o make a n  of  A positive  have  movement  services occurs  income  to explain.  force. Also,  and are o f t e n g i v e n  sharred  i s f o r the  values,  cases If  and recent  111  movers  are closer  importance  of  important weakly has  to their  income  movers  a shift  i n stages  to wealth  B, C,  a n d 0.  f i n a n c i n g once  more This  marriage  occurred. These  results  and  the t h e s i s  are  important  tenure.  hypothesis  stages  housing  Similar  wealth  and  needs g i v e n were  They  i n the e a r l y  households.  Those  current  S t a g e - C was  found  participation  household  wealth  and  income  Typically  80%  accumulating  head's  raising  the highest  i n c o m e was  Stage-C but household  work  small children.  space and q u a l i t y larger  deposit found  Ellis time  i n c r e a s e s of until  threshold  income  likely  likely  finacial  occurs  income  enter  continue  in  resources. financial force Between  Stage-C  i n c r e a s e s were  and  of  constraints.  and  higher  i t will  t o the l a c k of s p o u s a l while  form  to  i n c i d e n c e o f two  moves  to represent  f i n a n c e d by  Stage-D w i t h  an  cycles  i n f l u e n c e of f i r s t  Significantly  found  life  adjusts  by McLeod  t h a t d o n o t move w i l l  significant  was  during  they  tenure  commitment due  This  a household  stages.  research  households choose a  a high  I f the household  ownership.  -D,  Family  i n c o m e do n o t l e a d t o o w n e r s h i p  Stage-B where  and  how  study.  obtained  found  ammounts a r e a c c u m u l a t e d .  their  of t h i s  show how  results  (1982:178-184). home b u y e r s  are s u p p o r t a t i v e of the e a r l i e r  in determining  These  changing  in  e q u i l i b r i u m the  i s h i g h l i g h t e d . W e a l t h becomes  f o r recent  suggests  housing  loan amounts.  to increase  found. The  significantly  income does not i n c r e a s e  t h e r e t u r n o f t h e s p o u s e t o t h e work  until  force.  •1 12 Thus,  the above  shift  to ownership  n o n - m o v e r s may acquiring Thus, and  results  make  with wealth  be r e a c t i n g  the necessary  the negative  f o r t h e income  non-movers),  sense.  a n d income  of Stage-A  i n Stage-A  Stage-B and p o s s i b l y  while  i n p r e p a r a t i o n o f a move.  f o r wealth  elasticities  would  increases, while  n e g a t i v e l y t o income  resources  sign  Stage-D movers  recent  movers,  (movers and  -D m a k e s s o m e  intuitive  sense.  6.2.2.2 CONCLUDING The are  results  indicate  i m p o r t a n t . They  income  and wealth  ownership. weakly for  NOTE  significant.  s t a g e s . These  compares  recent  expected  mobility  confirmed. life  These cycle  stages  mobility.  stages  refect  are clearer movers.  of  groups are  and w e a l t h  i n the tenure results  between  d e c i s i o n s over  results  cycle  the p r o b a b i l i t y  of ownership  to non-recent  e v e n when a l l o w a n c e s expected  The i n c o m e  and m o b i l i t y  life  t h e slope c o e f f i c i e n t s of  Intercept differences  investment,  family  affect  family  in predicting  the probability  cycle  that  elasticities consumption,  the various when one  The i m p o r t a n c e  of  choice process i s  confirm the hypothesis a r e important  a r e made  life  for their  that  i n tenure impact  on  choice,  BIBLIOGRAPHY  A R T L E , ROLAND, a n d VARAIYA, PRAVIN, " L i f e C y c l e Consumption a n d H o m e o w n e r s h i p " J o u r n a l o f E c o n o m i c T h e o r y 18 ( 1 9 7 8 ) 38-58. AWAN, K . , O D L I N G - S M E E , J . C . , a n d WHITEHEAD, C H R I S T I N E M . E . , " H o u s e h o l d A t t r i b u t e s a n d t h e Demand f o r P r i v a t e Rental H o u s i n g " E c o n o m i c s 49 (May 1 9 8 2 ) 1 8 3 - 2 0 0 . B O E H M , THOMAS P . , "Tenure C h o i c e and E x p e c t e d M o b i l i t y : A S y n t h e s i s " J o u r n a l o f U r b a n E c o n o m i c s 10, B o u r n e a n d H i t c h c o c k e d . (1981) 375-389. BOSSONS, J O H N . , " H o u s i n g Demand a n d H o u s e h o l d W e a l t h : E v i d e n c e f o r Home O w n e r s " U r b a n H o u s i n g M a r k e t s - R e c e n t D i r e c t i o n s i n R e s e a r c h and P o l i c y , U n i v e r s i t y o f Toronto P r e s s , Bourne and H i t c h c o c k e d . (1978) 86-108. C H E V A N , A L B E R T , "Home G r o w t h , H o u s e h o l d Demography 8.4 ( 1 9 7 1 ) p . 451-458.  Density,  C L A R K , W . A . V . , a n d ONAKA, JUN L . , "Life Cycle Adjustment as E x p l a n a t i o n s of R e s i d e n t i a l U r b a n S t u d i e s 20 ( 1 9 8 3 ) 47-57 DOOLING, J . F . , "A Two S t a g e M o d e l H o u s i n g M a r k e t " Urban S t u d i e s  of Tenure 10 ( 1 9 7 3 )  and  Moving"  and Housing Mobility"  Choice in 199-211.  the  ENGLUND, P E T E R , a n d PERSSON, M A T S , " H o u s i n g P r i c e s and T e n u r e C h o i c e W i t h A s s y m m e t r i c T a x e s And P r o g r e s s i v i t y " Journal o f P u b l i c E c o n o m i c s 19 ( 1 9 8 2 ) 271-296. F R E D L A N D , D A N I E L R . , R e s i d e n t i a l M o b i l i t y and Home Heath, Lexington, Mass. (1974).  Purchase  G L I C K , PAUL C . a n d P A R K E , ROBERT, J R . , "New A p p r o a c h e s in S t u d y i n g T h e L i f e C y c l e o f T h e F a m i l y " Demography 2 (1965) 187-202. GOLANT, STEPHEN M . , " T h e H o u s i n g T e n u r e A d j u s t m e n t s Of Young And The E l d e r l y : Policy Implications" Urban A f f a i r s Q u a r t e r l y 13 ( 1 9 7 7 ) 95-108.  The  HENDERSHOTT, PATRIC H . , and S H I L L I N G , J . D . , "Capital A l l o c a t i o n and t h e E c o n o m i c R e c o v e r y Tax A c t of 1981" P u b l i c Finance Q u a r t e r l y 10-2 (1982) 242-273. HENDERSHOTT, PATRIC H . , and S H I L L I N G , J . D . , "The Economics of T e n u r e C h o i c e , 1955-1979" Research i n Real E s t a t e , Volume 1, J A I P r e s s ( 1 9 8 2 ) 105-133. JONES,  C ,  S.  GUDJONSSON,  and J . 1 13  PARRY L E W I S ,  "A  Two  Stage  11 4  Model of Tenure (1978) 81-92.  Mobility"  Environment  and P l a n n i n g  J O N E S , LANDON Y . , G r e a t E x p e c t a t i o n s : A m e r i c a Boom G e n e r a t i o n , C o w a r d M c C a n n G e o g h e g a n ,  A  10  and t h e Baby N.Y., (1980).  J U D G E , GEORGE G . , E T . A L . , I n t r o d u c t i o n To The T h e o r y P r a c t i c e Of E c o n o m e t r i c s , W i l e y a n d C o . , New Y o r k 517-528.  And (1982)  K A I N , JOHN F . , a n d Q U I G L E Y , JOHN M. , " H o u s i n g M a r k e t D i s c r i m i n a t i o n , Home O w n e r s h i p , a n d S a v i n g s Behaviour" A m e r i c a n E c o n o m i c R e v i e w 62 ( 1 9 7 2 ) 263-277. K I N G , MERVYN A . , " A n E c o n o m e t r i c M o d e l o f T e n u r e C h o i c e Demand f o r H o u s i n g a s a J o i n t D e c i s i o n " J o u r n a l of P u b l i c E c o n o m i c s 14 ( 1 9 8 0 ) 137-159.  and  KRUMM, RONALD J . , " H o u s e h o l d Tenure C h o i c e and M i g r a t i o n " J o u r n a l o f U r b a n E c o n o m i c s 16 ( 1 9 8 4 ) 259-271. M a c R A E , DUNCAN C , a n d S T R U Y K , RAYMOND J . , "The F e d e r a l Housing Administration (FHA), Tenure C h o i c e , and R e s i d e n t i a l L a n d U s e " J o u r n a l of Urban Economics 4 (1977) 360-378. MCCARTHY, K E V I N F . , "The H o u s e h o l d L i f e C y c l e and H o u s i n g C h o i c e s " Rand C o r p o r a t i o n P a p e r S e r i e s #5565 ( J a n . 1 9 7 6 ) , The Rand C o r p o r a t i o n , U.S.A. M c F A Y D E N , S T U A R T , a n d HOBART, ROBERT " T h e I m p a c t of I n f l a t i o n on t h e C a n a d i a n H o u s i n g M a r k e t , Urban Growth and L a n d D i r e c t o r a t e M i n i s t r y o f S t a t e f o r U r b a n A f f a i r s ( 1977). ' McLEOD, P. B . , and E L L I S , J . R . , "Housing Consumption Over t h e F a m i l y L i f e C y c l e : an E m p e r i c a l A n a l y s i s " Urban S t u d i e s 19 ( 1 9 8 2 ) 177-185. PICKVANCE, C. G . , " L i f e - c y c l e , H o u s i n g Tenure and Intraurban' Residential Mobility: A Casual Model" Sociological R e v i e w 2 1 ( 2 ) 1973 2 7 9 - 2 9 7 . PICKVANCE, C . G . , " L i f e C y c l e , H o u s i n g Tenure and Residential Mobility: a Path A n a l y t i c Approach" S t u d i e s 11 ( 1 9 7 4 ) 171-188. PINDYCK, ROBERT S . , a n d R U B I N F E L D , M o d e l s and E c o n o m i c F o r e c a s t s , (1981).  Urban  DANIEL L . , Econometric M c G r a w - H i l l , New Y o r k  Q U I G L E Y , JOHN M . , a n d W E I N B E R G , D A N I E L H . , "Intra-Urban Residential Mobility: A Review and S y n t h e s i s " I n t e r n a t i o n a l R e g i o n a l S c i e n c e Review 2 (1977) 41-66.  1 15  R A N N E Y , SUSAN I., "The F u t u r e P r i c e of H o u s e s , M o r t g a g e Market C o n d i t i o n s , and the Returns to Homeownership" A m e r i c a n E c o n o m i c Review (1981) 323-332. SHELTON, Land  JOHN P . , "The C o s t of R e n t i n g E c o n o m i c s 44 ( 1 9 6 8 ) 59-72.  Verses  Owning  The  a Home"  SLEMROD, J O E L , "Down-Payment C o n s t r a i n t s : Tax P o l i c y Effects i n a G r o w i n g Economy W i t h R e n t a l and O w n e r - O c c u p i e d H o u s i n g " P u b l i c F i n a n c e Q u a r t e r l y 1 0 - 2 ( A p r i l 1982) 193-217. SUTTON, JOHN, a n d WHITEHEAD, C H R I S T I N E , " T h e S a l e of Council H o u s e s : a c a u t i o n a r y n o t e " A p p l i e d E c o n o m i c s 14 ( 1 9 8 2 ) 295-303. S P E A R E , ALDEN J r . , "Home O w n e r s h i p , L i f e R e s i d e n t i a l M o b i l i t y " Demography 7.4  C y c l e S t a g e , and (1970) 449-458.  S T R U Y K , RAYMIND J . a n d M A R S H A L L , S U E , " T h e D e t e r m i n a n t s o f H o u s e h o l d Home O w n e r s h i p " U r b a n S t u d i e s 11 ( O c t . 1974) 289-299. S T R U Y K , RAYMOND J . , Home O w n e r s h i p " (1975) 19-25. SWEET, of U.S.  JAMES A . , Sociology  and MARSHALL, The R e v i e w of  SUE A . , "Income and Urban Economics and S t a t i s t i c s  "Demography And The 3 (1977) 363-405.  Family"  Annual  Review  DEPARTMENT OF L A B O U R , R e n t o r B u y ? E v a l u a t i n g Alternatives i n the S h e l t e r M a r k e t , U . S . Department of L a b o u r B u r e a u o f L a b o u r S t a t i s t i c s B u l l e t i n 1823 ( 1 9 7 4 ) .  WILKINSON, R . K . , a n d LAW, I . A . , "A M o d e l o f Tenure Determination in a Local Housing Market" Applied E c o n o m i c s 10 ( 1 9 7 8 ) 173-182.  APPENDIX  6.1  EXTENDED  6.1.1  LITERATURE REVIEW  ECONOMIC S T U D I E S R E L A T E D TO T E N U R E  6.1.1.1  INTRODUCTION  6 . 1 . 1 . 2 THE ECONOMICS Opinions greatly. wealth costs  OF THE H O L D I N G  There  i s t h e argument  maximizing  over  should  different  costs  implying tenure duration. This  m a t c h up w i t h  the observed  shifting  time  o f f against  of address  occurring  i t i s simply and  i n the marketplace from  a  fixed  variable  costs  the higher  choice  i s only  duration  a  hurtle  natural duration  s i n c e any cost  r e n t i n g t o owning  vary  frames.  (1968) p o i n t s o u t , t h e lower  ownership are traded  function  that  tenure  d e c i s i o n where v a r i a b l e  are minimized  transaction  PERIOD  a s t o why h o u s e h o l d s c h o o s e  Shelton of  CHOICE  should  advantage of  be a r b i t r a g e d  away. Shelton's  quantative  from any q u a l i t a t i v e user  cost  study  aspects.  obtains  Although  a p p r o a c h he s t a t e s c l e a r l y  results Shelton  separate follows a  that  " c o n s i d e r a t i o n s other than r a t i o n a l economic c o s t c o m p a r i s i o n s may, a n d p r o b a b l y d o , d o m i n a t e a f a m i l y ' s c h o i c e t o own o r r e n t , " a n d t h a t "dwellings a v a i l a b l e f o r rent c o n s t i t u t e , to a l a r g e extent, a separate market other than dwellings f o r purchase." These o t h e r  factors  are left  1 16  out i n favour  of a  pure  economic c o s t a p p r o a c h . S h e l t o n ' s a n a l y s i s f i n d s t h a t i n the pre-tax case  ownership i s favoured  i f occupancy  exceeds f i v e y e a r s , and o n l y t h r e e and a h a l f y e a r s i n t h e a f t e r - t a x a n a l y s i s , w i t h h i s 1968 d a t a . The r e l a t i o n s h i p between t h e c o s t c u r v e s  f o r each  tenure  a r e shown i n F i g u r e #A-1.  FIGURE #A-1 USER COST TRADE OFF BETWEEN RENTING AND OWNING  hold cost  Holding period i n years.  2  'Standard  Hobart,  case  f o r o w n i n g a n d r e n t i n g f r o m McFayden a n d  1977, p . 6 5 .  2 9  1 18 Hendershott user  cost  approach  ownership  rate  increases, in  higher  They  mortgage  t o income  the real  cost,  ownership has decreased.  the  mortgage  (in  t h e U.S.A.) h a s i n c r e a s e d  rate  on  historic  decrease tenure  choice  The model user  than  shift  real  income.  f o r changes  to empirical  results  rate,  because  the expected  on t h e o t h e r  cost  hand,  to capital allowances  based  has negated the r a t e . The r e s u l t a n t  cost  This  of c a p i t a l  that  utilized  Permanent i n tastes  artificial  evaluated,  occurring  i n the higher  tax bracket cost  was  and a f f o r d a b i l i t y  model  was  then  observations.  case. was  The  For  h a d an  income v a r i a b l e  ratio  a  the r a t i o of  income  each equation  a significant  i n the user  advantage.  i n v e s t i g a t i o n proposed  homeownership rate  o f .999 w i t h  t o changes  than  financing  and S h i l l i n g  R-squared  rate  cost  and d e p r e c i a t i o n  replacement  and permanent  two t a x b r a c k e t s  financing  t o o w n e r s h i p o f t h e 1970's was an  income c h a n g e d .  compared  cost  tax brackets.  the susceptabillity  of the ownership user  t o account  decrease  for i t s tax deductability  by l e s s  of the homeownership rate costs  and a  price  The a f t e r - t a x u s e r  The l o w e r  after-tax  Hendershott  included  the  rather  of the rapid  ratios,  homes. W h i l e  of sale  of the r e a l  arbitraging  as  of purchased  tax at point  i n t h e U.S.A.  the after-tax  after allowing  r e n t a l accommodation  gains  on t h e d i r e c t  f o r d i f f e r e n t marginal  for  for  in light  size of households.  that  appreciation  the increase  t h e 1970's  i s repeated  find  (1982) expand  to explain  during  the average  analysis  and S h i l l i n g  only  adjustment  normally  119 distributed change A  over  similar  found  variable  study,  was  was  similar  as  not  year  rates  study  t o be  availability a  five  i n ownership  (1980). Here, was  a  l a g , and  observed  found  t o be  Shilling,  r e c o g n i z e and  tenure  decision.  This  Jaffee  and  (1979)  Rosen  have  sharply different  1970  U.S.A. d a t a  of  half  those  of  in  the  first,  Choice  years  follows  ownership same a g e  Hendershott  as  from  Shilling  Rosen  results  concluded  age  specific  economic  rates.  25  to  34,  that  They of  1955-1979" R e s a r c h  show  using  families  with  family  Also, ones,  households  c o n c l u s i o n s were ownership  "The  in Real  rates of  1,  had  with  far  heads  drawn; vary  owning  Economics of  Estate  to  and t h r e e - q u a r t e r s  younger  attractiveness  Shilling,  by  o w n e d a home, c o m p a r e d  especially  Two  the  obtained  heads were homeowners.  group.  in  and  characteristics  only one-quarter  than  and  well  demographic  rates  demographic  as  ownership  of  rate,  CHOICE  which  3 0  the households  households,  time w i t h the  See  that  with older  individual lower  25  and  a d j u s t f o r demographics  with different  under  credit  insignificant.  TENURE  Rosen,  over  3 0  and  income  d e p o s i t growth  c o n s i d e r e d i n the Hendershott and  1978.  were o b t a i n e d however,  Thrift  the  Rosen  the  Hendershott  head  Rosen and  measured  by  of  and  in a l l cases. Also,  6 . 1 . 1 . 3 DEMOGRAPHICS AND  a  by  1960  significant  tested  households  between  completed  results  e x p l a i n e d 2/3  1982,  over and  Tenure p.119-120.  1 20 second, change as  the  aggregate  with  with  the  general  investigations structural  economy w i d e  demographics economic now  of  ownership  the  rate  will  p o p u l a t i o n as  well  conditions. Current  normally  change u n l e s s  adjust  they  for  focus  on  empirical  demographic very  specific  segments. One  early  importance  of  completed  by  perspective  data in  base  the  local  that attempted  demographics Dooling  oh  (1972).  the  the  impact  encompasses a  process  of  tenure  on  a  consumer  and utility  the  decision.  of  tenure U.K.  their  tenants  rental  The  who  were  homes f r o m  the  government a u t h o r i t y . The  because  investigation of  the  i s based  durability  and  on  the  commodity, housing  requires  a  a n a l y s i s than  economic  a n a l y s i s applied to durable  model  richer  i s proposed  obtainable other  where  combination  good combinations  Tenure  choice  the  fully equity  i s seen  supply  available  of  t o be  a l l types  r e q u i r e d t o meet  as  and  that  a  tenure  choice  traditional goods. A evaluate  form  two the  of  stage best  p h y s i c a l s t r u c t u r e and a l l  under  i n each  the  individuals of  premise  complexity  multi-dimensional  that  used  was  affecting  survey  purchasing  the  decision  identifying  characteristics  and  to evaluate  Dooling  d i r e c t e d towards  understanding formulation  study  form  each  form of  a f f e c t e d by  tenure.  the  fact  of  housing  units is  of  tenure.  Also,  loan/value  ratios  that not  initial  for financing  121 after  transaction  costs  i s seen  as a n o t h e r b a r r i e r  to  ownership. The the  d a t a used  first  choice  constraint  service  allows  utilizes  by A r m s t r o n g  (1967)  attitudinal  Dooling,  using  constructs.  These  ownership.  of  size,  age and  the Dooling  predicting renters. adults, weekly five  36  The  h o u s e h o l d s have  by  their  their  to identify  a  strength  and  analysis  status,  and  and  identifies as;  nine  perceived  independence  data c o l l e c t e d  o c c u p a t i o n of  buyers and  regression  relationship  buying behaviour.  c a r o w n e r s h i p . The  39  obtained  with 22  advantages included;  the household statistical the model  of  24  correctly  continuing  equation includes  t h e number  renting,  weekly  g r o s s income  of  the head  of the h o u s e h o l d ,  attitudinal  scores.  however,  attitude  s c o r e s due 16 t h a t  less  Coefficients  emphasis  was  to possible  withdrew  successfully.  cost  of  performed  placed  on  offer  analysis  and  as  the  to purchase was  of  owning,  intercorrelations.  their  Factor  head,  results  of  predicted  unit.  possible  cost  the  the  current  current  results  strong  s t u d y were good of  weekly  research  are c l a s s i f i e d  expected  14 o f  market  Socio-economic  income,  family  picture  showing  factor  general/financial,  gross  given  around  influences.  Dooling  between  consumption  a clearer  behavioral  of  because  study gets  of changing t e n u r e w i t h o u t a l t e r i n g  housing This  market  f o r i n the Dooling  used  Also, were  here  to  1 22  generate the  factor  loadings  linear regression  R-squared  value  affected himself  acts  showing  pattern.  cycle  was 3 1  t o support  that  one  finds  originally H e r e , an while  a constant  to this  subject  plan  are likely  i s maintained  c a n be d e t e r m i n e d  The o p t i m a l  CONSUMPTION  theory  from a  to a  lifetime by  utility  wealth  f o rconsumption  over  o u t t o be a s m o o t h c o n t i n u o u s  ones  function  time. The  from  economic  family  uses one's  life  concept cycle  o f income  utility  of consumption  results. family  In other  life  suggests  fora life  stages.  cycle  that  receipts  areas  A r t i e and Varaiya,  Homeownership, p.38.  a r e used  holding  one's  i s used.  i s related  Life  Cycle  i s different life  cycle  period.  The  l i f e t i m e and the  to generate  of the s o c i a l  concept  behaviour  over  cycle  The e c o n o m i c  l i f e t i m e as the relevant  pattern  See  concept  Y a r r i adds  i s maximized  turns  cycle  and Brumberg.  as a cushion  that  constraint.  3 1  cycle  of consumption  consumption  function  of  rate  accumulation  of the l i f e  by M o d i g h a n i  consumption  life  towards asset  by t h e s t a g e  individuals savings  model which had an o v e r a l l  L I F E C Y C L E CONCEPT AND  a t . The l i f e  proposed  c o e f f i c i e n t sf o r  of .50.  6.1.1.4 THE ECONOMIC Attitudes  of a t t i t u d e  t h e economic  sciences  The f a m i l y  the life  t o household  Consumption and  cycle  types.  123 Household  types  children.  The  the  last  this  a r e based  family  life  two s e c t i o n s  section  on m a r i t a l cycle  of t h i s  considers  status  concept  chapter.  the economic  and age o f  i s discussed The  in  remainder  approach  to the  of life  cycle. Tobin for  adds  a given  allocate between  market  evenly  will  not always  of  out that  illiquid  that  rate.  by Y a r r i a n d t h e n  points  liquid  behaviour.  financing  This  liquidity  respond  be a b e t t e r  constrained  choose  wealth maximizing  a course  with  acquisition optimal affected  rate  then  suggests  this  becomes  poorer  choose  liquidity  renting  a r e not as more  due t o liquidity  geared  with  theory. cycle  theory i s  portfolio considerations  and d i s p o s a l  of assets  and market  size  f o r saving.  to f u l f i l l  of l i f e t i m e consumption  by t h e f i n a n c i a l  constraints,  changes  i n d i c a t o r of  of action  An a p p l i c a t i o n o f t h e l i f e associated  households  This  decision  who  Tobin  to marginal  and u s u a l l y  those  originally  constrained  may  individuals usually  will  difference  by T o b i n .  wealth  b a r r i e r s while  to the  r e s u l t was  or i n t e r e s t rates.  t h e younger  showing,  and t h e i n d i v i d u a l s  as expected  choice  by  individual  wealth  since  constrained  an  illustrated  In the tenure  important  cycle  time and subject  interest rate  discount  also  life  interest rate,  over  the market  subjective proven  t o the economic  the  i s understandably  of the a s s e t ,  imperfections.  The  liquidity  A r t i e and  Varaiya  124 investigate  this  disposition  of a large  residential  home. P r i o r  relationship economic  problem;  timing  the a c q u i s i t i o n and  indivisible studies  have  some f o r m o f a w e a l t h  However, c u r r e n t  significant result  is  i nt h e  linkage  income,  thus  constrained  income has been  strong  life  found  a liquidity  results  constrained  are obtained  theory.  depending  cycle  t o be a  f a c t o r i n p r e d i c t i n g home p u r c h a s e s .  supports  different  a  c y c l e , a n d g e n e r a l l y a weak  between homeownership and c u r r e n t  theory.  shown  between homeownership and stage  life  supporting  asset, the  This Here,  on whether one  e x p l a i n i n g home o w n e r s h i p o r p r e d i c t i n g home  purchases. Artie under  and V a r a i y a  the p r o f i l e  of u t i l i t y  part  of the l i f e  from  later  consumption  this  discount  measure of permanent important  over  that  time.  i s required long  now v e r s u s  choice  decision,  the l i f e In a  cycle, liquidity  must weigh t h e  consumption  t h e lower  Consumption  in life,  over  the tenure  the individual  reduced  cycle  down payment a g a i n s t ownership.  profile  environment,  loss  that  of consumption  d e p e n d s on t h e a s s e t constrained  find  i n the early t o save  f o ra  run cost of  greater  consumption  d e p e n d s on t h e i n d i v i d u a l ' s  r a t e . Human c a p i t a l , income,  i s likely  factor i n the tenure  decision  or i t s flow  t o be a n process.  125 6 . 1 . 1 . 5 HOMEOWNERSHIP OVER THE HOUSEHOLD L I F E The theory Under  above  study  originally this  period  proposed  a decrease  Financial assets  time preference discount  rate.  accumulation period  In a perfect  of return  price  changes  really  price  changes.  equilibrium  i s less  to a life  a decrease  rates  future  i n consumption  where any i n c r e a s e  requires  period.  i n consumption  rate  leads  on a l l a s s e t s  i fthe  than  cycle  However,  utility  t h e market of  asset i n one  i n another  complete  will  represent  i n one  i n consumption  with  cycle  i n another  i n consumption  market  distribution  life  and Brumberg.  are accumulated  discount This  t h e economic  by M o d i g i a n i  model an i n c r e a s e  requires  period.  supports  CYCLE  foresight the  be i n e q u i l i b r i u m a n d  the present  value  i n an imperfect  of stock  will  likely  of a l l  world the be  di f ferent. The part of  house purchase  of the l i f e  a household  housing every and to  evaluate  of  housing  on t h e c u r r e n t  the  cycle impact  increase  of an exogenous  utility  period  cycle  model  i n the future  price  constraints  accumulation increase  goods i n  time  the l i f e  house purchase  and l i q u i d i t y  model o f a s s e t  of other  the i n i t i a l  (1981) uses  an a n t i c i p a t e d  mortgage market life  Ranney  between  as  of the consumption of  and the consumption  of time  retirement.  c a n be c o n s i d e r e d  framework. The l i f e t i m e  i sa function  services  instant  cycle  decision  decision. added  With  t othe  i t i s shown  i n the future  that price  126 of the  h o u s e s depends on c u r r e n t m o r t g a g e m a r k e t c o n d i t i o n s , future price  price,  and the r a t i o  income. T h i s constraints purchase be  of houses  last  relative  of l i q u i d  to the current  assets  to future  conclusion suggests  that  are relevant i n predicting  d e c i s i o n , and as mentioned  considered  i n tenure  choice  liquidity  t h e house  earlier,  model  labour  result  this  should  evaluations.  6 . 1 . 1 . 6 THE J O I N T NATURE OF H O U S I N G CONSUMPTION  AND  INVESTMENT John dealing choice the  Bossons  with  (1978) has p r e p a r e d  the general  modelling.  economic  investment  life  a good  review  theories that a f f e c t  tenure  He s u p p o r t s  a stronger  c y c l e model  but also feels the  and consumption  aspects  a p p l i c a t i o n of  are not completely  separate. Bosson's permanent  i scritical  income models t h a t a l l o w h o u s e h o l d s t o  maintain  consumption  approach  i scriticized  ignores  the degree  affected general  of c u r r e n t consumption and  at constant  levels.  f o r two main  t o income  First, i t  choices are  d e c i s i o n and second,  d i s r e g a r d f o r the importance  compared  standard  reasons.  t o which consumption  by t h e t e n u r e  The  there  of wealth  i n d e f i n i n g the households  i sa  as budget  constraint. Bossons p o i n t s out that wealth savings  the traditional  was t o l e t i t be d e t e r m i n e d choices,  approach t o  by t h e h o u s e h o l d s  income and age, as i t v a r i e s through  a  1 27 household  life  assumes t h a t relatively years.  income,  constraint  are influenced  traditional  points  i n the s p i r i t  that  market,  when  separability  straight  of I r v i n g  may  fail  approach  consumption  tenure  Traditionally  constraint  be  as an  risk  on t h e  the other  portfolio  of p o r t f o l i o  could  maximizing  e x p e n d i t u r e s . On be t r e a t e d  rather  hand,  independent  returns subject  and  uncertainty  approach  models  choice.  housing  generate  utility budget  of t h e  services  This l e d to the portfolio  Bossons the  t o be  a number o f s t a n d a r d  f o r housing  expected  That  household  made t h e a n a l y s i s  then  of maximizing  constraints. of  could  levels  i n the  a r e assumed  t o be r e a l i s t i c .  subject to a lifetime  tolerable  later  evaluated i n the l i g h t  problem  to  the  as compared  (1936),  decisions  as a s t a n d a r d consumer  home o w n e r s h i p  these  Fisher  treated  problem  t o determine  deficiency  requires  f o r w a r d . Demand  households  and r e t i r e m e n t  t o the tenure choice problem.  This result  assumptions  at a  by w e a l t h .  and investment  separable.  cycle-model  f o r consumption  out another  approach  consumption  the  likely  s a v i n g s and age because  Bossons  housing  life  i n both working  i s much more  budget  this  maintain consumption  uniform level  indicators  is,  Here,  households  Wealth  consumers to  cycle.  makes c l e a r , capital  this  market  separability  several  basic  assumptions  m u s t be made i n o r d e r t o result.  An e v a l u a t i o n  of  on  128 these is  assumptions  required  under  i n order  the light  to evaluate  consumption  and investment  assumptions  required  complete services, return  (2) p e r f e c t  on a l l a s s e t s  characteristics transactions This  will  between in  allow  of the risk  independent  is  true  not related then  horizon set in  returns  return  lending.  This  individuals  over  intermediation  diversification assumptions many s t u d i e s  that  without  underlay dealing  asset's over  has a  return.  If this  a one y e a r given  the current  or moral  hazard  the borrowing of  s u c h a s human c a p i t a l . asset  markets  of a l l asset  exist  types  no i n d i v i s i b i l i t i e s can provide  the separability household  so  states of nature  access  economies of s c a l e .  with  held  (4) T e m p o r a l l y  i m p l i e s each asset  a l l potential  (7) Assuming  that  off.  allows  complete  of a s s e t s .  i s no d i f f e r e n c e  portfolio  assets  t o own p o r t i o n s  diversification achieved.  that  (3) no  ( 5 ) No b a n k r u p t c i e s  illiquid  requirement  of household  there  portfolio  assumption  (1)  and t h e one a c t u a l l y  t o any other  i s t h e same l i f e t i m e  market  such that t h e  adjustments  trade  on a s s e t s  of information.  ensures  desired  an o p t i m a l  funds a g a i n s t The  that  of  f o r housing  behaviour,  in portfolio  the result  Housing  include;  markets  i s independent  and household  costs  result  markets  capital  the portfolio  terms  return  rental  market  the separation  conclusion.  for this  and perfect  of the housing  saving  allows that i s  exist to  These  result  (6)  full seven  used i n  and  asset  1 29 allocation these  b e h a v i o u r . Two q u e s t i o n s a r i s e  assumptions.  realistically  First,  imposed  the d e r i v e d r e s u l t s  can these  assumptions  i n the housing  robust  i n regard to  market.  to a relaxation  be  Second, a r e  of these  assumptions. The rental areas  first  assumption  markets  f o r housing  of concern  limitations  here.  services  factors  on o f w h i c h  all  possible  related these area  d e c i s i o n s may of concern,  Due t o t h i s  be i n f l u e n c e d  likely  that  two h o u s e h o l d s  i n their  condition then an  chosen  i s possible,  independent implies  that  that  t h e same  f o r a household  differ  market  incomplete markets  of the p o r t f o l i o  are not  human c a p i t a l )  of consumption  a household's  having  of tenure. I f t h i s  i t i s no l o n g e r p o s s i b l e  optimal allocation  markets  This generates the  (including  form  tenure.  rental  result  only  closely  first  possible  characteristics  be  by t h e above  services.  of  Third,  Also,  f o r housing that  composite  improvements.  complete  wealth  may  the l e n g t h of secure  seems r a t h e r  many  on t h e a v a i l a b i l i t y  decisions  w i t h home  Second,  including  of a t t r i b u t e s .  and investment  are three  contracts.  good  be l i m i t a t i o n s  combinations  There  of  there are normally  i s location.  as i n the case  It  First,  i s a composite  there will  consumption  services.  on t h e l e n g t h o f r e n t a l  housing  nature  deals with the completeness  exist, to obtain  services  allocation  decision.  optimal portfolio  This  allocation  1 30  will  depend  obtainable but  also  factors  on  on  only  play.  will  depend  the  This on  housing  sectors  the  A  (2)  income  The  assets,  moral  hazard  the  fact  hazard  of  in  and  exists that  of  market  of  possible  Simply  put,  somewhat  all  these  of  borrowing  traders  an  do  in  fact  Transactions which  will  limit  to  the  there  market  where user  from  are the  is  •  evaluating  (including  strain  are  is  assumptions,  independent  no  bankruptcy  assumptions  is  suffer  costs,  generally the  or from  an  liquidity  that  of  moral  characteristic  suggest  asset,  in  household  limiting  housing  demand  tenure.  information  violations  illiquid  or  market  there  These  the  services  comes  does  come  important  tenure,  bundle  of  for  housing  returns  that  insufficiency  of  asset  asset  lending.  problems,  of  is  to  other  homeownership  proxies  assured  market  (5)  there  are  aversion,  Thus,  likely  demand f o r  criticism  capital  (4)  and  that  of  independent  characteristics, other  form  risk  services. are  format  service  housing  are  that  bundles  length  the  the  This  one  source  in  returns  to  the  second  housing).  and  housing  on  efficiency  wealth  because  returns  household's  housing  certain  value  the  for  variables  limited  investment  demand  is  severely  dependent  the  and  services.  where  of  on  assets,  besides  into  for  not  of  bundles.  housing  and c o n s t r a i n t s  the  is  on  exist.  costs  and  portfolio  information adjustments.  costs It  exist  should  be  131 noted  that  costs  because  net  price  information costs differ they  have the  seller  being  these  causes  not  r e c i e v e d by  rather  Both  do  a  effect  able  in general  seller of  a  and  to  the  t r a n s a c t i o n but the  effect any  illiquidity  demographic  become  reduce  t r a n s a c t i o n at  c o n t r i b u t e to  socio-economic  investor/consumer  in a  simply  also reducing  to effect  factors  from t r a n s a c t i o n  a  price.  which  factors  important  of  of  i n the  the  purchase  decision. The  fifth  constraints. they  limit  assumption  Unfortunately  borrowing  collateral  at  the  to  time  illiquid  assets  are  Further,  i f the  value  loan  be  the  by  past  dependence  of  borrowing  current  asset  implication.  values  assets  basis  secured  Another units  do  important  be  general  assets  as  collateral.  but  current wealth.  an  important  with negative  past  the  additional  Thus c u r r e n t borrowing  has  as  d e c l i n e s below  maintained  as  taken  i s made. A l s o ,  c o n s t r a i n t s on  assumption  of  the  in  is This  as  well  as  empirical net  i s given  w o r t h may only  on  have the  loans. is violated  problems  implication  probability  and  security  e v e n when c r e d i t  present  of  borrowing  well  Households  sizeable of  as  exist  value  the  may  influenced  borrowing  g e n e r a l l y taken  of  restricted.  with  they  the  not  amount b o r r o w i n g  d e b t may  delt  of  f o r the  because  divisibility. relationship  home o w n e r s h i p a n d  household  housing This  has  between  an the  variables.  1 32 Such  indivisibilities  number o f h o u s e h o l d s feasible. model  increased  importance  household  variables  Also,  with  of  capital  markets.  are  to  equity  invested  effect  collateral rates  additional provided  high  "forced"  in a  of  This w i l l  combined w i t h  homeownership of t h e i r  the  of t o t a l  as w e a l t h  wealth  increases.  of markets  borrowing constraints,  i s that  of young households have a r e l a t i v e l y services  subsequent  consumption  have  effect,  wealth  incomplete rental  b y home o w n e r s h i p .  and  result  t o reduce  empirical  show up b o t h p r i o r  payments)  with  of c a u s i n g the f r a c t i o n  consumption  in  along  high proportion  determined  such households  will  the margin  i n owned homes t o d e c l i n e  indivisibilities  savings  on  period.  potential  when  and i m p e r f e c t  indivisibilities  an u n u s u a l l y  Another  and  markets  requirements w i l l  the t r a n s i t i o n  t o the  a n d a r e a c c e n t u a t e d by t h e  i n a home a n d p o s s i b l e  empirical  due  indivisibilities  with  f o r households  allocate  model  attempts to  used. of  These  m i n i m u m down p a y m e n t  during  a linear  incomplete rental  to  when o n e  of zero p r o b a b i l i t i e s  interact  effects  of r e d u c i n g the  homeownership i s  problems  the e f f e c t s  homeownership  the effect  f o r which  This creates  the situation  tendency  have  may  be  increased  h i g h demand  where  f o r the  and h o u s e h o l d p r o d u c t i o n  Such  increased  t o home o w n e r s h i p t o homeownership  s a v i n g s i n the form  savings  rates  ( f o r down i n t h e form of  of mortgage  debt  133 service. Taking  a l l these  that  consumption  clear  h o m e o w n e r s h i p can  factors  not  and be  into consideration,  portfolio  analyzed  6 . 1 . 1 . 7 CONSUMPTION A S P E C T S OF Understanding points  out  that  motives  i t is  for  separately.  THE  INVESTMENT D E C I S I O N  imperfections  exist,  Bossons  that  " i t i s necessary to model inter-household d i f f e r e n c e s i n t h e demand f o r h o u s i n g i n a way t h a t c a p t u r e s b o t h v a r i a t i o n s i n t h e demand f o r the consumption of h o u s i n g s e r v i c e s and v a r i a t i o n s i n t h e demand f o r p r i n c i p a l r e s i d e n c e s a s an asset. " 3 2  T h u s one  must c o n s i d e r  how  services  i s related to  household  addition  to  portfolio  the  balancing  consumption  of  interdependent decision demand only Two  pure  to  own  the  investment  housing  services  consumption will  depend  and  ( o r m o r e e a s i l y ) be  services  demanded and  considerations.  aspects The  resulting  investment  in part  on  the  the decision.  the  through  quantity  of  See  Bossons,  1978,  p.91.  can  homeownership. housing  balancing  notes  "other things being equal, the higher the q u a n t i t y of s e r v i c e s demanded ( f o r example, due t o a l a r g e r f a m i l y ) , t h e m o r e w i l l be the p o r t f o l i o i m b a l a n c e t h a t m u s t be a c c e p t e d i n o r d e r t o o b t a i n t h i s q u a n t i t y of h o u s i n g s e r v i c e s i n the form of p a r t i c u l a r b u n d l e s of 3 2  The  households  c h a r a c t e r i s t i c s that  portfolio  Bossons  housing  associated  d e p e n d s on  obtained  important,  for  characteristics in  considerations.  for p a r t i c u l a r housing  f a c t o r s are  demand  134 housing through Thus,  c h a r a c t e r i s t i c s which a r e home o w n e r s h i p . "  the portfolio  separately  but only  Various housing  model  c a n n o t be  along  with  consumption  Direct  variables  include  number a n d a g e o f c h i l d r e n , number and other  demographic  nature.  include;  of the household  of  unique  desire  tastes  p a r t i c i p a t i o n of e t c . These  t o which  leisure  space a r e viewed as indicate the strength  as they  may  relate tothe  tenure.  contribute  t o complementry  o f home  l e i s u r e and  the use of l e i s u r e  improvements  e t c . ) . These a c t i v i t i e s  result in capital  value  home o w n e r s h i p . H o u s e h o l d  characteristics associated  i s only  realized  than  average  demand  leisure  activities  include  age, retirement  whether  there  will  a higher  housing ibid.  f o r home  are c h i l d r e n . Normally  have more service  l e i s u r e time inputs.  through  oriented status, and  the older  and l e i s u r e time  Children  time  (carpentry,  i m p r o v e m e n t s whose m a r k e t  with  3  that  situations include  the production  gardening,  the extent  factors  f o r security of  homeownership  status,  i n the  head, e d u c a t i o n ,  are useful  that  of adults  force  and the use of housing  Factors  for  labour  f a c t o r s may a f f e c t  complementry. Other  marital  v a r i a b l e s have an i n d i r e c t  the  activities  3  Other  these  indirect  decisions.  f a c t o r s of a socio-economic and  influence, spouse  evaluated  c h a r a c t e r i s t i c s a f f e c t t h e demand f o r  space.  household,  obtainable  3 3  family require  may a f f e c t t h e a m o u n t  1 35 of  home o r i e n t e d l e i s u r e  often  obtained Housing  bundle vary  of  necessary  matching as  demand  d e m a n d may A  be  any  investment  a  The  substantial  which  in design  i n f l u e n c e d by  Demand  for ownership  of  amount  of  housing  exists  has  shape.  "S" If  imperfections i n the  capital  rationing  then  factor  then  pension The consider  financial  wealth  e x c l u s i o n of  savings,  is  portfolio  illiquid  likely  exist  due  minimum  suggests but  market  that  the.  probably  exist  wealth  and  will  be  However i f relevant  business  limiting assets,  and  necessary. s i d e of  that housing  investment  i s the  This  achievements.  some  financial  relevant constraining variable.  controlled  as  occurs  ownership.  linear  capital  cost,  homeownership.  i s obtainable. This  budget c o n s t r a i n t i s not  the  to  after  household  be  guaranteed  investment  educational  to  can  i n c e n t i v e to  the  leads  related  only  may  required for  i s normally  because  indivisibilities  heterogeneous  implicit  budget c o n s t r a i n t t h r e s h o l d w i l l  asset  a  a very  with preferences  alterations.  Also,  for uniqueness  are  Household preferences  as  tenure,  ownership.  being  housing  costs provide  long-term  through  well  structural  transaction obtain  as  characteristics.  i n time,  space demands  ownership.  i s recognized  h i g h l y and  costly  to  through  activity,  this  model w i l l  have  u n i t s h a v e a number o f  a s s e t s . However,  their  lumpiness  to  advantages as  1 36 investments with  the  liquidation  ownership input (ie.  and  by  of  are  real  the  high  transaction  important  costs associated  disadvantages.  Moreover,  estate requires significant  o w n e r . T h i s may  be  complementry) to l e i s u r e  negative  activities  managerial  or  positive  and  affect  demand a c c o r d i n g l y . This  illiquidity  managerial will age  problems  likely of  the  inflation  reduce  adjustment. expected be  head  If other  reduced;  these  other  maintain  liquidity illiquid  stability  and  6 . 1 . 1 . 8 THE  Bossons nature  assets are  estate  a s s e t as the  tax  and  h e l d then  include  should  household  imply  i t is  illiquid  However,  a s s e t s may  the  portfolio  investment  should a l l o w the  of  CONSUMPTION AND tests  to  ownership  locational  demand.  the  housing  household  balance  sheet  INVESTMENT D E C I S I O N  a number o f  Empirical  education,  an  this  increase ownership  decision.  balance  outweigh  investments  business  real  the  BOSSONS MODEL:  C O M B I N I N G THE  the  may  in i t s portfolio.  thus  a s s e t and  However,  demand ' f o r h o u s i n g  assets. This  some  f o r such  rises.  illiquid  business  of  investment  t h e demand  factors  that the  an  of non-owner-occupied  household hedge  as  market  sheet  t h e r e were  and 61  family  size,  assumptions  and  i n f o r m a t i o n was  the  attributes labour  marital  tenure  obtained  financial  occupational status,  participation,  these  about choice  from  statements.  On  the  reflecting force  status,  age,  number  1 37 and  age  of  children,  These v a l u e s variable To  were  on  the  attributes  attributes. explain  and  of  rotated  These  2/3  The  or  region  dependent  of  20  the  variable  the  1/3  of  to  attributes,  total  59  accounted  variance  using  the  from  of  increase  attributes  regression  about  size).  dummy  components were e x t r a c t e d  identifiability. approximately  a  (city  tenure.  reduce c o l l i n e a r i t y principle  to  location  regressed  representing  twenty 61  and  these  variance  of  of  for  the  59  factors  was  the  able  tenure  choice. Because variable, as  a  the  a  of  the  probit  function  more a c c u r a t e study.  dichotomous or  nature logit  specification  Instead  a  linear  but  of  the  model  is  i s not  probability  dependent suggested  utilized  function  in  was  used. The  results  characteristics significant principle increase thus  effect  oriented  the  the  to the  effects  behave as choice  housing the  of  user  ability  goods or  cost.  on  household  the  of to  are  expected. family  services  size  The is  demanded  either  owning  consume  other  services.  where more l e i s u r e return  of  homeownership, a l l  and  of  cost  the  to  tenure  reduces  effect  increasing justify  the  This  consumption  on  quantity  increase  indirect  relating  predictors,  the  renting.  show t h a t  time  investment  There  is  i s spent and  to and or  an at  helping  home to  138 The  existence  of  the  It  is likely  use  of  household  the  of  are  that  home f o r  in addition  wife's  occupational  of  seen  impact  with  has  e f f e c t on  Threshold  e f f e c t s are  seen  through  non-linear. between  In  those  differentiates that  have  the  to  distort as  a  out the  be  data,  consequence  an  wealth  not.  alternative  an  associated  to  is  have  a  ownership.  For  equity  to  this  note where  high  that  is  highly  be  did  m a k e down  wealth over  those  wealth  is a  slightly  those  who  were  homeownership  investment  that to  very  ownership  time  This  variable differentiates  Having  should  out  forms  impact  consumption motives  those  turned  and  which  excellent  for  large  wealth  of  of  leisure  e f f e c t of  p r o b a b i l i t y of  turned  on  in  the  the  analysis.  motives.  for a period  and  i n the  with  homeowners  number  clear  do  f u n c t i o n . One  factors.  impact  also,  assumed  that  decreasing  The  negative  significant  those  the  This  with  investment  individuals  be  head  related with  p r o b a b i l i t y of  quite  the  managers.  are  the  of  wife,  to  cost  may  and  e f f e c t the  households  payments and  of  there  variables  and  influence  ownership.  non-linear  be  directly  appears  because  on  age  significant  husband  an  professionals  Financial  can  the  status  areas  the  leisure activities.  leisure activities  negative  is also  to  Location  metropolitan  p o s i t i v e and  age  adults  activity.  c h i l d r e n and  ex-post  decide  wealthier.  on  may  ownership  1 39 It assets  was m e n t i o n e d would  seems t h a t to  likely  other  demand  with  and r i s k  for illiquid  In  the presence  reduce  t h e demand  influences  a n a l y s e . Demands  occupation  that  c h o i c e s may  a s s e t s and  general the empirical  of  the wealth constraint  is  highly  non-linear.  thresholds.  service  difficult a s s e t and  affect  both the  ownership. results  are consistent  f o r ownership.  The  i s substantial,  importance  and i t s e f f e c t  This confirms the effect  Additionally,  characteristics  factor  of the i l l i q u i d  taking  t h e d e s c r i b e d demand  illiquid  f o r ownership. I t  make t h i s  on t i m e  of  of  socio-demographic  of households  affect  tastes  of housing  bundles, and g i v e n the nature of the housing  . market,  this  affects  tenure  choice.  B o s s o n s h a s a few m a j o r  conclusions;  F i r s t , "the importance of wealth t h r e s h o l d e f f e c t s and second, the s i g n i f i c a n c e of l i f e c y c l e r e l a t e d v a r i a t i o n s i n h o u s e h o l d demand f o r p a r t i c u l a r c h a r a c t e r i s t i c s of housing that are obtainable only with s e c u r i t y of t e n u r e . " " 3  Because  home o w n e r s h i p  function other can  by i n f l u e n c i n g  not j u s t i f y  through  of t h i s  since  of the  p.104.  feedback  from  one  traditional decisions.  w e a l t h c a n be  on w e a l t h  time and  relationship,  and consumption  household  production  leisure  home i m p r o v e m e n t s d u r i n g l e i s u r e  important  "Bossons,  i tutilizes  an a p p l i c a t i o n  of investment  Additionally,  3  how  r e s o u r c e s . As a r e s u l t  separation  an  enters the household's  increased  time  there i s  the tenure of  1 40 ownership.  This  seems c r i t i c a l alternative wealth.  f o rmiddle  ways o f t i m e  income  feedback  of l e i s u r e .  families  w i t h few  and resources t o increase  Thus t h e importance  lifetime  6.1.2  important wealth  o f home o w n e r s h i p  i n c o m e d i s t r i b u t i o n c a n be  on  substantial.  ECONOMIC-DEMOGRAPHIC L I F E C Y C L E S T U D I E S OF OWNERSHIP  6.1.2.1  INTRODUCTION  In yield tend  this  section  support  four  t o the hypothesis that  t o have d i f f e r e n t  demographic  levels  characteristics.  Odling-Smee and Whitehead relationship for  private  demand  rental  important housing  influence  second  that  variables  depending  paper,  on  by Awan,  (1982), evaluates the attributes  varies  Although  that the  by s o c i a l a n d  i n c o m e was a n  i td i d n o t i n f l u e n c e  above m i n i m a l  a n d t h e demand  i t was f o u n d  services  characteristics.  services  The  The f i r s t  h o u s i n g . Here housing  economic  of importance  between h o u s e h o l d  forrental  demographic  a r t i c l e s a r e reviewed  consumption  of  requirements.  s t u d y , by S t r u y k and M a r s h a l l  (1975),  l o o k s d i r e c t l y a t income a n d homeownership. Here t h e tenure  decision  as i n f l u e n c e d  socio-demographic ownership  was f o u n d  between h o u s e h o l d s and  race.  family  by income  units.  i s stratified  by  The income e l a s t i c i t y  of  t o be s i g n i f i c a n t l y d i f f e r e n t stratified  based  on f a m i l y  type, age,  141  The and  third  Marshall  study  discussed, also  (1974),  evaluates the  homeownership. Here, that  affect  that  determine  family  life  choice, next are  the  the  of  directly of  questioned  and  (1982),  the  the  the  financial  and  the  stages.  The  They  when t h e  empty n e s t wealth  and  income v a r i a b l e s  per-capita also by  of  within  family  the  life  determinants.  life  be  an  cycle  cycle  stages  by  the  reduced is  space  completed of  income  stages.  Wealth  significant  size, life  while cycle  Thus d e n s i t y  important  Ellis  consumption  presence  t o be  family  i s explored.  significant  process  f o r the  is  marriage-partnering  of  found  income  determined  evidence  rearing  the  The  p o s i t i o n of  that  absolute dwelling  r o o m s / p e r s o n may  as  clear  within  tenure  variables  housing  are  and  with  McLeod and  children  are  consumption  significant  of  by  of  child  constraints  such  choice  cycle,  indicate  stage),  and  peer  wealth)  those  affect  nominal  section,  life  and  find  of  analysis  schooling  also  determinants  this  results  initial  consumption (the  (income  factors  same a s  mobility.  income over  family  the  d i s c u s s e d but  s h o w s how  to expected  empirical  over  i s not  chapter  of  the  seem t o d i r e c t l y  influence  study  i s an  household.  this  are  that  Struyk  of  Factors associated  for this  permanent  last  decisions  stages  related  importance  The  consumption.  reason  section  decision  by  determinants  i t i s determined  tenure  cycle  completed  for stages  as  consumption  along  with  are  measured variable  wealth,  1 42 i n c o m e , and and  their  the  number of  results  will  children.  now  be  of  the  major  O d l i n g - S m e e and different and  households,  education,  order  to  test  importance  (1982)  separated  have d i f f e r e n t for  of  characteristics  themes of  the  study  that  out  in  demand,  was  by  utility  differences  i n c o m e on  articles  R E N T A L HOUSING DEMAND  underlying  Whitehead  four  discussed.  6 . 1 . 2 . 2 HOUSEHOLD A T T R I B U T E S AND One  These  size,  Awan,  occupation  preferences.  rental  In  demand and  the  household  were matched a g a i n s t  various  dwelling  were  to  attributes. First, affect  the  several  household utility  household  formulating  characteristics  of  different  variables  dwelling  dwelling  were  attribute  demand  w e r e made up  variables  and  the  activities. affect of  the  i t s physical  there  are  concerned  two with  members, e t c . ) household  single  structure types  of  from a as  and  by  employment  household  well  related  were p e r c e i v e d dwelling as  (size,  unit  to in  i t s location.  structure,  those concerned  the  demographic  terms Thus  households c h a r a c t e r i s t i c s ,  demographics  activities  were measured structure,  derived  of  home) l o c a t i o n  These c h a r a c t e r i s t i c s utility  before  equations.  characteristics of  attributes  identified  Household  (outside  seen  (employment, following status  occupied  the  with  the  shopping,  attributes;  of  the  working location etc.).  the  of  These  household  household,  dwelling,  those  whether  a  143 socio-economic colour, in  the  test  terminal  the  the  household age,  and  head,  the  These a t t r i b u t e s were  hypothesis the  the  education  household.  influence by  g r o u p of  that  utility  his/her  age,  number of  people  then  to  used  household c h a r a c t e r i s t i c s  obtained  income e l a s t i c i t y  of  from h o u s i n g  demand  for  as  measured  dwelling  attributes. Secondly,  dwelling  utility  generating  those  consume. Three major these and  include;  the  analysis three  The  employed  aspects  neighbourhood  of  to  dwelling,  existence  dwelling.  Whilst  of  the  amenities,  aspects  included;  low  formulated  characteristics. attribute as  well  social  demand e q u a t i o n  as  was  of  on  determined  of  identified.  and  the  the  type  neighbourhood and  and  of and good  low  seven  dwelling  household for each  b a s e d on  a minimum e x p e n d i t u r e  and  aspects  q u a l i t y of age  e a c h of  based  Factor  three  neighbourhood,  for  was  questions  accessibility  Implicit prices  then  were  and  i t s quality,  size.  survey  included;  neighbourhood.  was  households  rooms  q u a l i t y , and  Stability  aspects  dwelling  several  good  A  number o f  of  environment, of  dwelling,  accessibility  q u a l i t y aspects  accessibility  the  total  dwelling  and  as  c h a r a c t e r i s t i c s were c o n s i d e r e d  representative was  Dwelling  c h a r a c t e r i s t i c s that  s i z e of  accessibility.  considered  a t t r i b u t e s were c o n s i d e r e d  factor  an  dwelling income  that  factor  varied  with  1 44 household for  each  characteristics. dwelling  attribute  socio-demographic These minimum amounts this  The demand  varied  characteristics  with the of the household.  expenditures represent the necessary  for different  minimum  Thus t h e minimum e x p e n d i t u r e  family  t y p e s . Consumption  a m o u n t was c o n s i d e r e d d e p e n d e n t  e q u a t i o n s were based  on o r d i n a r y  above  on  income.  least  squares. From t h e e s t i m a t i o n several such the  interesting  result number  household  well"  results  i s that  characteristics particularly  through  "unreasonable".  seems t o be a s i g n i f i c a n t based  on h o u s e h o l d A  second  functions  minimum  result  tended  level  propensity minimum  propensity  fits  dwelling  was  that  level "fairly  but none were  aspect  o f rooms predictable  i n most o f t h e demand  characteristics  of consumption  t o consume  characteristics.  number o f  equations had  T h u s t h e number  to influence  levels  was f o r  affected  t h e minimum  demand  first  characteristics.  for dwelling  attributes  function  a r e l a t i v e l y large  and "not so s a t i s f a c t o r y "  considered  the  fitting  significantly  The o t h e r d w e l l i n g  equations  were o b t a i n e d . The  the best  of rooms. A l s o ,  consumption factor.  o f t h e s e demand  utility  than  (1982:194).  of consumption  T h i s combined  t o consume r e s u l t  the household more  through  through the  the marginal  A s was n o t e d varied  with  by  earlier,  household  the low m a r g i n a l  suggests  that  dwelling  1 45 attributes to  are  considered  expenditures  attributes  on  were  necessities  a l l other  still  (1982:195).  amount v a r i e d  different  types,  amounts  There  the  greatly  and  rooms  have a  importance  to  single  the  number of  the  weak  levels.  primary or  of  consume  'marginal  In the  number o f  do  not  to  the  'mean  for dwelling attributes'  worth  rooms.  attributes but  result  important  r o o m s . The  rooms a l s o e x t e n d s  consumption demand  the  propensity to  most  noticeable effect of  number o f  services dwelling  between households  i s f o r the  i s the  compared  low.  exception  that  when  minimum e x p e n d i t u r e  marginal  e x p e n d i t u r e . When a l l o t h e r  they  t o be  and  t o consume d w e l l i n g a t t r i b u t e s '  mentioning,  of  Thus,  the  i s very  i s one  propensity  number o f  and  goods and  considered  necessary  excess  necessities,  are  The  determinant combined  overpower  the  importance  basic  the  necessary  income e l a s t i c i t y as  of  reported,  " t h e o v e r a l l e s t i m a t e i s d o m i n a t e d by t h a t f o r t h e n u m b e r o f r o o m s , ... s p a c e i s v i e w e d a s a necessity." Thus,  the  results  indicate  the  most  important  the  main  element  characteristics doubt  will  level  of  important  to  the  important  this  in  role  bears  out  rooms i s  cycle  in determining  s e r v i c e s consumed and  study  of  the  no the  length  variables  that  is  household  family l i f e  h o l d i n g p e r i o d s . Economic as  number  n e c e s s i t y . I f space  demand, c h a n g e s  related  housing  respective  dwelling unit  of  p l a y an  t h a t the  income  are  of also  i s the  146 strongest  factor  consumption i n c o m e was  of  rooms. For  also a  contributor  the  other  significant  changes  housing  in  characteristics,  determinant  and  to overall f i t .  Several First,  in determining  c o n c l u s i o n s can  in regards  to  the  be  drawn  from  main q u e s t i o n  of  the  results.  the  study,  " t h e r e a p p e a r s t o be s u f f i c i e n t e v i d e n c e t o support the hypothesis that household attributes e f f e c t demand and u t i l i t y and t h e r e f o r e s h o u l d be i n c l u d e d i n t h e i r s p e c i f i c a t i o n . " A l s o , t h e s e - h o u s e h o l d c h a r a c t e r i s t i c s "work more t h r o u g h minimum l e v e l s of c o n s u m p t i o n t h a n t h r o u g h t h e m a r g i n a l p r o p e n s i t y t o consume t h e s e a t t r i b u t e s " when o n e a l l o w s f o r l i f e c y c l e s t a g e s . A n o t h e r r e s u l t was " t h a t s p a c e i s by f a r t h e m o s t i m p o r t a n t v a r i a b l e i n d e t e r m i n i n g demand and u t i l i t y , and, second, t h a t i t i s a 'necessary' attribute." 3 5  The  c o n c l u s i o n s of  Whitehead utilized  study in this  inclusion size,  of  thesis.  and  can  market.  regards  attribute r o o m s . The that  this  adjust  or  can  A w a n , Odling-Smee and  the  that can  foremost  is  variables  relating  to family  i f the  not  of  and  and  be  basic  the  number o f  Whitehead,  or  1982  rental  p.,  195  important  number  rooms  that households  purchase  rental  most  i s the  seems  of d w e l l i n g  i n the the  be  the  income  levels  purchased  suitability  attribute  that  results  to d w e l l i n g units,  importance  t o , and  important  education. Household  in determining  i s the  Awan, O d l i n g - S m e e  First  in determining  attributes In  some  demographic  occupation  important  3 5  yield  the  of  indicates  desire  to  decision  and  197.  is  147 based  s t r o n g l y on h o u s e h o l d  consumption  6.1.2.3  i s tied  INCOME AND  characteristics  while  excess  s t r o n g l y t o income.  OWNERSHIP ALLOWING FOR  HOUSEHOLD  TYPES Struyk of  income  and M a r s h a l l  i n the tenure  (1975), choice  evaluate  household  looked  at socio-demographic  stratified The obtain the  sub-groups  types.  a better understanding  tenure  studies  choice  This  i n a tenure  purpose of the Struyk  o f how  of t h e income e l a s t i c i t y  occupancy  (1975:19).  appear area by  income  impacts from  t h a t when  separated  of modelling  from a t h e o r e t i c a l  perspective  i s well  (1975:19).  past  due t o t h e  The e s s e n c e  and M a r s h a l l  on  f o r owner  more a c c e p t a b l e .  Struyk  i s to  between t h e o f demand  i s likely types  model.  i s unclear  estimates  of household  family u n i t s as  and M a r s h a l l model  due t o t h e w i d e d i s c r e p a n c y  aggregation  investigation  choice  d e c i s i o n , which  This  importance  d e c i s i o n as i t v a r i e s  among d i f f e r e n t directly  the  They  out  in this  summarized  state  " t h e demand f o r o w n e r o c c u p a n c y c a n be t h o u g h t of a s one d i m e n s i o n o f t h e more g e n e r a l demand f o r h o u s i n g s e r v i c e s . The demand o r h o u s i n g by an i n d i v i d u a l h o u s e h o l d h a s b e e n d e m o n s t r a t e d t o d e p e n d on t h e h o u s e h o l d ' s i n c o m e , i t s ' s i z e , c o m p o s i t i o n and p l a c e i n the l i f e c y c l e , t h e . r e l a t i v e p r i c e of housing s e r v i c e s g e n e r a l l y , and on c e r t a i n t a x p r o v i s i o n s . " It being else  i s normally  a homeowner  observed  that  increases with  i s held constant.  I n between  the probability i n c o m e when  of  everything  t h e extremes of low  1 48 and  high  of  tenure  Struyk  income t h e r e choice  and  to  s e e m s t o be  income  a  strong  increments.  M a r s h a l l p o i n t out  However,  (1975:20) t h e r e  "host of f a c t o r s o t h e r than income differences i s ownership rates." This  would  different  e x p l a i n why between  the  cities  frequency  at  differences  affecting  differences  in family type,  characteristics influences.  These  owner o c c u p a t i o n services  the  as  choice  the  to  income  to  the  of  owning  at  that  stratification  accurate develop  results. separate  The the  perspective will  Struyk  by  Based models  and  the  types,  characteristics. which household rather  on  the  on  of  relative  a  Thus  will  is  the income  level.  relationship yield  and  such  more  Marshall types.  to evaluate  demand d i f f e r e d  E m p h a s i s was  prices  family  for several family  d e l i n e a t e d by  of  housing  income  Struyk  was  price  households  from  type  this,  include  i n f l u e n c e here  this  Marshall study  income e l a s t i c i t y  household  of  that  household  These  related  structure.  affect  is  levels.  i n the  However, d i f f e r e n c e s i n households, structure  produce  doubt  and  ratio  tax  a  composition,  i n c r e a s e s . A major of  are  i n f l u e n c e the  rental  this  as  ownership  income  and  d e c i s i o n d e p e n d s on  probability  of  stock,  tend  relative  progressive nature  tenure and  factors  which  r a t e s no  size  housing  market. G e n e r a l l y  decreases  various  ownership  i n the  sensitivity  how  between  socio-demographic not  characteristics income e l a s t i c i t y  placed  were of  on  determining  important,  purchase.  In  but this  1 49 study  i t was  determined  home o w n e r s h i p types,  age,  and  race.  starts  high  rate  income  but  sensitivity  the  lowest  households. families income and  Here, and the  with  the  supports  small  increases  are  the  households  reflects  are  of  marginal  elasticity  of  middle-aged  with  to  decreasing  saving  and  its  A  high  families  the that  eldest young  s e n s i t i v e to  get  low  of  type.  youngest  typically  required  changes  a  elasticity  hypothesis  past  impact  at  household  the  down p a y m e n t c o n s t r a i n t s . T h e  elder  the  i s found  the  savings  that  of  with  family  income e l a s t i c i t y  for each  i s found  of  between  decreases  level  elasticity  This  income e l a s t i c i t y different  then  is different  income e l a s t i c i t y while  the  is significantly  ownership with  that  over  liquidity  elasticity  of  decisions  reducing  i n income.  families falls  The  the  income  between  the  two  extremes. Family  g r o w t h and  o w n e r s h i p more (Struyk aged  and  affected to  a  by  a  greater  number of extent  that  better  f o r many  study  their  Understanding  understanding  such  demand  the  i n the  households  makes t h e  group, as  older  and  e x a c t l y what  tenure  of  m a k e home  factors besides  than  i n f l u e n c e the  h o u s e h o l d s and  pressures  1975:24). T h i s  interesting  counterparts. are  imperative  Marshall  g r o u p an  other  they  middle are  income and younger these  decision will  factors  lead  r e l a t i o n s h i p s between housing  age  market.  to  a  150 6 . 1 . 2 . 4 DEMOGRAPHIC I N F L U E N C E S ON Another Marshall  behaviour  several  demographic  the  earlier  as  insights  variables  tenure  s i xtypes  head,  types  the other  primary  relating  f o r each  market  of economic found  that  c h o i c e t o be l a c k i n g i n  relocated  relationships  four  type,  households.  households  race,  divided  tothe  to housing  c h o i c e by a g e a n d h o u s e h o l d  and M a r s h a l l study,  household  background  of the d i f f e r i n g  o n l y c o n s i d e r i n g newly  into  look at the determinants of  a r e e x p l o r e d . They  s t u d i e s on t e n u r e  investigation  Struyk  by S t r u y k a n d  a r e o b t a i n e d , and t h e importance  and  between  completed  homeownership. Although  study,  their  t h a t was a l s o  (1974) h a s a c l o s e r  household above  study  OWNERSHIP  were  as w e l l In the  disaggregated  husband-wife  by t h e age o f t h e h o u s e h o l d  two were  'other  family'  types and  individuals.  Struyk  and M a r s h a l l b e l i e v e  that  "the determinants of household tenure choice a r e c e r t a i n l y t h e same s e t f o r t h e d e m a n d f o r ~ housing s e r v i c e s . Tenure i s a s i n g l e , a l b e i t , v e r y i m p o r t a n t , a s p e c t o f h o u s i n g demand. From p a s t s t u d i e s o f t h e demand f o r h o u s i n g s e r v i c e s , one w o u l d e x p e c t t h e t e n u r e d e c i s i o n t o depend on h o u s e h o l d t y p e a n d a g e , f a m i l y s i z e , r a c e a n d income." (1974:290). This  i s the starting  this  s e t permanent  be  a closer  Family at  size  income  i s added  match w i t h t h e d e c i s i o n  because  The s t u d y  level also  To  i ttends t o  making h o r i z o n .  i s included to help explain  t h e same i n c o m e  tenure.  point f o rthe investigation.  why  choose d i f f e r e n t  includes tenure  households  forms of  choice of the  151 households  peer  significant strongest  group,  factor.  this  t u r n s o u t t o be a m i n o r b u t  The p e e r  amongst m i d d l e  choice also  aged  seems t o be  households,  those  30-44 a n d 45-64 a g e b r a c k e t s . The c o m p l e t e tenure of  choice as a function  persons  in. the household,  characteristics non-relatives,  other  of the household aged  family  income t a x s u b s i d y from probability  o f permanent  of that  t y p e ' s peer  The r e s u l t s  type's  (except  'other') the effect  income  increase  Before to  life  some  in  moving  and  cycle  results  permanent were  that  (1974)  and M a r s h a l l  t o be i n  f o r most  family  of increments of  found  that  significant  of ownership over  at a  related  there are  s h o u l d be n o t e d  from t h e  i s some  measures of both  interest  f o r a l l except  was  s i g n i f i c a n t . However, t h i s  the  method employed  income. current  determinants of the  age 65, here  of recent years nominal determinant  f o r t h e husband  only current  may h a v e  in calculating  other s i g n i f i c a n t  variables,  as  income v e r s u s permanent  w i f e groups  only  group  that  s t u d y . There  and  regression  and t h e average  consumption  stages and economic  and M a r s h a l l  probability  federal  o f home o w n e r s h i p  on t o h o u s i n g  the choice of current  Struyk  indicate  the  rate.  interesting  Struyk  number  (presence of  homeownership.  decreasing  income,  members, e t c . ) ,  the probability  model has  unique  home o w n e r s h i p ,  family  i nt h e  resulted  permanent  income from  income;  a  income.  Secondly, the  i n the  Husband-wife  1 52 models  was t h e number o f p e r s o n s  Whether  those people  non-relatives, choice. family the in  i n one c a s e ,  i n a family  probability  across deals and  as with  family with  boarders, effect  the presence  with  of ownership  t h e 45-65 age group  variable,  children,  e t c . had no d i s c e r n a b l e  However, member  with  i n the household.  o f an aged  a non-aged head  f o r husband-wife  types. A third  sex o f t h e head were peer  strongest  f o rmiddle  major  group  result  households.  aged  were  found  There  insignificance effect  Here,  resulted  a 5% d i f f e r e n c e  10% d i f f e r e n c e Lastly  group  i n ownership  i n related  peer  t h e r e was g e n e r a l  of the t a x subsidy v a r i a b l e ,  was l i k e l y  age  husband and w i f e types.  influence.  rate.  greatly  t o be  seems t o h a v e a n income a n d p e e r  ownership  captured through  such an  t h e income  variable.  6 . 1 . 2 . 5 INCOME, WEALTH AND HOUSING CONSUMPTION OVER LIFE  THE  CYCLE The  by  this  important determinants.  influences  f o r each  of  of the study  Occupation  group  families  t h e income measures, v a r i e d  Fourthly,  increased  by 5 p e r c e n t . The impact  the non-husband-wife  probability  on t e n u r e  last  article  McLeod and E l l i s  consumption income  (1982), deals with  the family  and wealth p o s i t i o n  analysis number  over  t o be d i s c u s s e d i n t h i s  life  housing together with the  of the household.  compiles significance  of variables  cycle  relating  tests  to life  section,  The  b e t w e e n means on a cycle,  income,  and  153 wealth.  These are  then  used  i n r e g r e s s i o n s on  consumption. The  McLeod and  variables  of  Ellis  income and  study  wealth, a l b e i t  sophisticated  extent, within  This  will  and  approach the  family By study,  McLeod and efforts. those  Duvall  (1971),  the  age  the  (1982:177). Ellis  argues  are  of  35,  this  strategy  stages  note  stages,  of  the  goes  that the  of W e l l s  and  further two  Gruber  while the  most  popular and  i n terms of  latter the  defines oldest  study  (1982:177)  follow  the D u v a l l approach,  role  development  on  In a d d i t i o n ,  and  single  data  in this  this  specific  Staples  the  life  (such as  parent  families)  group.  precludes  then  child  McLeod  maturation  cycle  (1979)  stages  category  1979),  the  which  requirements ( i . e .  c o h a b i t a t i o n rather than  Murphy and  and  the  (Nock  than  (1966)  defines stages  child,  this  recent  child.  cite  of  stages.  a  non-traditional  age  (1982),  d e p e n d c e r t u s p a r i b u s on  based  they  cycle  s c h o o l i n g l e v e l / a g e of  Citing  family  housing) oldest  the  life  Ellis  former  youngest  terms of  and  a  cycle  s e p a r a t i o n between  They  frameworks are  in  life  to  cycle.  most p r i o r  of  of  considering family by  family  economic  not  a l l o w the assessment  significance life  evaluates  stages  marriage.  f o r the a  single however,  further  of  the  here Also,  importance head the  above lack  of  investigation  of  1 54 The are  as  life  cycle  follows;  stages  (1)  utilized  s i n g l e , age  of  (2)  couple,  age  of  head  children;  (3)  couple,  age  of  eldest  six  and  twelve;  thirteen  and  above  35,  ways,  first,  are  used  one  very  of  sample  family  life  Housing r o o m s on of  this  an part  behaviour  of  Significant  few a  the  life  i n s i g h t to cycle  on  each  consumption absolute of  the  household  changes occur  per-capita  consumption  intentions to  change  i n the  Here,  the  influence  the  housing  unit  also  increases  i n consumption  The  of  results  market.  total  space  at  wealth  the  1 and  family  of  number  stage  2 increases  significantly.  some r e l a t i o n s h i p b e t w e e n t h e expand  entire  patterns.  basis.  declines  is  problem  insights into  between  effect).  space and  dwelling  units  This  framework.  consumption  give  two  income,  the  using  by  in  stage  consumption.  per-capita  study  head  cycle  sub-group  six  between  of  of  no  between  utilized  influence  relative  35,  no  child  life  i s measured  and  35,  age  approaches  stage  than  child  are  Ellis  l e s s than  eldest  stages  housing  be  major  couple,  housing  the  T h e r e may  the  (6)  that  cycle  eldest of  relative  s i z e on  child  age  within  articles  (marriage/coupling while  and  less  l e s s than  cross-sectional regressions  give  the  couple,  of  c h i l d r e n . These  assess  from p u r e l y Secondly,  (5)  age  regressions  to  and  couple,  seventeen;  no  wealth  and  (4)  McLeod and  head  children;  (pre-school);  by  size.  this  in absolute  increase  in  Quality  of  stage. amounts  The  next  occurs  1 55 between  stage  schooling and  system.  4;  when t h e  T h i s change  i t leads to a drop  Between and  5  stages  housing One  2 and  (secondary  differences  6  3 and  consumption  these  eldest  declined  (1982:180)  child  enters  space  consumption. of c h i l d r e n ) , and  occur.  s t a g e s may  not  In be  4  between  McLeod and  terms  of  necessary. stages  l e a v e s home). Here  significantly.  of  the  few s i g n i f i c a n t  s i g n i f i c a n t change o c c u r s  (when t h e  space  school entry)  consumption  more  capita  (the a r r i v a l  i n housing  child  i s the a d d i t i o n  i n per  3  eldest  5  and  dwelling  Ellis  conclude  " t h e f a m i l y l i f e c y c l e s t a g e s c a n be h e l d t o d e f i n e s u b g r o u p s w i t h r e l a t i v e l y homogeneous h o u s i n g r e q u i r e m e n t s or p r e f e r e n c e s . " The  r o l e of  fulfilling  income and  these  preferences  development. This for  each  used,  life  area  Independent family size  variables  of  the  justifying  primary  s t o c k of  wealth  dwelling,  at  of  payment. found  Based  t o be  sale on  t o new  this  new  wealth, by  home p u r c h a s e . was  household  equity  that is  i s normally  housing  measure  income,  determined  variable  f o r the  and  was  units  The the  transferred down  position  space  the  the  v i a the  the wealth  significant for per-capita  are  person.  household  the  thie w e a l t h  residential time  on  variables  bedrooms per  include;  downpayment  interesting  dependent  l o c a t i o n . Wealth  premise  the  and  an  in  individual regressions  s t a g e . Two  person,  s i z e and  follows  i s done w i t h  cycle  per  wealth constraints  was  156 consumption.  S i m i l a r i l y , household  significant except  indicator  for stages  1 and  bedroom p e r - c a p i t a The  results  financial child  negative  sign,  district  has  and  head  of  over  The  from  5  on  number o f  of  effect  for  are  eldest  children  the  expected  business  on  the c h i l d  consumption  position life  the  number  rearing  logical.  f o r the economic  variables  of  changes  cycle  two  -  2 due  the household s t a g e s and  falls  stage the  i n stage  increased. consumed  L a r g e r and  between but  of  the  to the  impacts  on  rises  proportion  of  arrival)  two but  the  increases significantly.  financial  3 and  financial  income  (child  higher quality  stages  spouses  The 3  income  household  this  to the higher i n c i d e n c e  income h o u s e h o l d s .  the household's  this  return  (when t h e  the central  positive  i n each  i n stage  families  of  school)  were weaker  significant  p r o p e n s i t y t o consume. H o u s e h o l d  income  consumption,  in a l l stages with  elasticities  significantly  In  school).  person  financial  significantly  (80%)  a  computed.  The  the  results  i n stage  distance  These e f f e c t s  not  space  the most  a significant  Unfortunately, are  The  occurs  significant  bedrooms per  stages.  4.  show t h a t  enters secondary was  per-capita  also  consumption.  constraint  variable  of  of  i n c o m e was  4  strain  commitment housing  (children  going  i s reduced  workforce.  is  due  is usuallly to to  the  157 Earlier little  between  secondary little  i t was  couple,  stages  school).  except no  noted  children), worth  From  the  overall  also  price a  the  and  i s reduced  the  effect  well  but  the  indicate  this  determinant.  wealth  stage  of  strain  stage  4,  The  stage  p l a y s an  that a  major  there  income  and  i n c o m e on effect  (older  i s minimal.  where  wealth  McLeod and  wealth  6  Ellis  consumption  i s not,  and  is their,  essential  role  in  important  aspects  consumption.  These  results  indicate  should  be  change  in a dwelling unit  considered  changes of area area  at  changes  consumption  financing.  after  (1982:183) note documented  By  i t i s evident  increase occurs  a  housing  wealth.  very  entering  position  financial  process  changes  child  financial  the  becomes more of  results  (eldest  smaller housing  switch to wealth  constraint  5  f o r i n c r e a s e s of  net  is  4 and  Here  increases  purchase  that consumption  t o be  and  f o r r e s e a r c h on  predictors.  for  area, household  children  consumption densities  while  were  indicate  In the  family  w e r e n o t . On  variables  is directly  discussed later  significant,  tenure  choice. A  associated with  density. Further studies in  important total  some  an  these  factors  cross-sectional  income and  wealth  life  and  area  significant.  cycle per  Thus,  person  the  life  cycle  may  be  equation were  number  of  regressiona l l  i t seems  housing  d e c i s i o n s represent an.adjustment within  this  stages yet  of  total  area  158 consumption  6.1.3  i s more r e s t r i c t e d  DEMOGRAPHIC S T U D I E S OF  by  financial  variables.  M O B I L I T Y , AND  TENURE  tenure  decision  IMPACTS Other be  influences  ascertained  Important  factors  behaviour, the  with  Within  any  one  likely  be  the  cycle  are  with  human  those  related  opportunity  to  moves h o u s e . Moves t e n d  cycle  function  The  of  period  family stage  or  time  life  cycle  tenure  economic to  can  literature.  dealing  choice,  changes of  holding  the  change to  will  s u c h as  next  be  stages.  choice  factors  to  income  family  life  stage.  6.1.3.1  L I F E C Y C L E S T A G E S AND  Albert  Chevan  relationship and  theory  tenure  life  choice  demographic  any  when one  associated  and  the  making process.  occurs  a  the  of  s u c h as  decision  tenure  from  on  moving.  associated suggests family  Emphasis  the  major  are  r e q u i r e m e n t s and whereby stages implied  the of by  family  on  the  of  family  the  Changes  cycle  the  composition.  to  Evidence  is  Chevan cycle  is  family  with  family  i s matched  life  in  i s the  density,  moving  composition.  Moving  of  how  family  (1971:451).  desires.  the  growth, household  naturally associated  life  that  in  dynamic  composition  the  investigated  i s placed  changes  composition  composition  (1971) has  between  with  MOBILITY  changing  space  mechanism  at  different  the from  housing previous  needs  159 studies be  has c o n s i s t e n t l y  a major  determinant  Along found  Moving  a t any g i v e n  i s associated  stage.  The  towards  first  moving d e c i s i o n  having  that  arrival.  Also,  factors  become  school birth  there  point  important  Childless  These  life  impact  of space  spacious  location  required This  life  cycle  may  according  from the  free  affect  t o Chevan's  fairly  o f f with  and  evident.  high  moving  years of t o move; t o  to changing  status  influences.  The more p r o f e s s i o n a l  economic  e m p l o y m e n t c h a n g e s may  moves a s c o m p a r e d  to  decision  e f f e c t s that  families maintain do t a p e r  housing  effect  consumption  more m a j o r  on t h e  neighbourhood  cycle  f a m i l i e s a r e more  since  cycle  t o accommodate t h e i r  adjust  more m o b i l e  household  i n a n t i c i p a t i o n of  i s clearly  of c h i l d r e n  but the rates  marriage.  new  of  of moving.  f o r any l i f e  and include  of c h i l d r e n  are family  Chevan  be some e c o n o m i e s o f s c a l e  of c h i l d r e n  at this  independent  results. rates,  may  to  the b i r t h  to adjust  has the biggest  q u a l i t y . The f a m i l y  There moving  t h e median  or s h o r t l y afterwards  and growth  needs,  f u r n i t u r e and appliances.  the a r r i v a l  arrival  rates  used  c h i l d r e n . The move t o more  before  their  higher  cycle  1971:457).  duration,  due t o t h e i m b a l a n c e  a c c o m m o d a t e new  suggests  be  child  (Chevan  marriage with  life  i n housing  i s seen as t h e mechanism  space d e n s i t i e s  to  of moving  the l i n e s of changes  that  children  shown t h e f a m i l y  to the less  and  social  f a m i l i e s may correspond  be  with  professionally  1 60 skilled  worker.  Income g r o w t h the  more p r o f e s s i o n a l  neighbourhood and  families,  career  increases.  and f a m i l y  birth the  density  household  current  density,  of marriage  of a c l o s e such  to  mobility  i n f l u e n c e s of the b i r t h  and the  declines  of marriage. A l s o ,  i n t h e near  future  of  independent  density  moving c o n s i s t e n t l y  eighteen years  move,  be r e l a t e d  are  Regardless of household  i s h i g h a move  indicator  a s t h e number  t h e e c o n o m i c s o f home  e v a l u a t e s t h e major  of c h i l d r e n ,  first  expect  and d u r a t i o n  influences.  during the  e s t a b l i s h m e n t . As e x p e c t e d  t o become more f a v o u r a b l e .  children,  of the c h i l d l e s s  This could  ownership  found  influence  decreases  one w o u l d  m o v i n g . He  age f o r  more moves o c c u r  decreases  Chevan a l s o  middle  may  In both cases  years of marriage. Moving  years married  into  c a r e e r s which  changes.  non-childless  early of  continues well  future  i f household  is likely.  move a t t h e t i m e  as h i g h d e n s i t i e s ,  during  would  Any  of a indicate  renting. The decision change the  t i ei n with occurs  residential  f o r two r e a s o n s . F i r s t ,  and the tenure  when  there i s a  i n r e s i d e n c e t h e r e i s an o p p o r t u n i t y t o e v a l u a t e  situation  and determine  which  appropriate  and s e c o n d l y , l e n g t h  residential  move w i l l  with  mobility  influence  the tenure d e c i s i o n .  form  of tenure i s  of time  t o the next  the economics  The r e l a t i o n s h i p  associated  between  161 mobility  and tenure  choice  major  f i n d i n g of a study  finds  that  i s a strong  done by R o n a l d  one. This Krumm  was t h e  (1984).  He  "the r e s u l t s do n o t s u p p o r t independence between m i g r a t i o n and tenure s t a t u s " d e c i s i o n s . In a j o i n t model of m i g r a t i o n and tenure s t a t u s , " e f f e c t s of exogenous v a r i a b l e s l i k e l y t o a f f e c t one o f t h e s e d e c i s i o n s d i r e c t l y o f t e n d e p e n d on other d e c i s i o n s i n v o l v e d " (1984:271-272). Based on o t h e r r e s e a r c h C h e v a n n o t e s " c h a n g e s i n household c o n d i t i o n s that a l t e r the b e n e f i t s and costs associated with a l t e r n a t i v e residence site l o c a t i o n s a r e an e s s e n t i a l i n g r e d i e n t i n explaining the household migration d e c i s i o n " (1971:263). His  results also  characteristics regional  Speare J r .  investigated cycle  and r e s i d e n t i a l  and c h i l d  cycle  age-marital  residence,  he f o u n d  duration  little  i s only  with  stages  t o be  superior  separately. were examined of  b y home previous  variation in mobility  duration.  important  a  b a s e d on  s t a t u s , and d u r a t i o n  f o r homeowners w h i l e  declined  ownership,  using  rearing periods,  when m o b i l i t y r a t e s  ownership,  mobility.  these  mobility. In  finds that  either classification  Additionally,  < residence  on  (1970) a demographer has  of age, and l i f e  status  using  renters  significant  location influences  m o b i l i t y , Speare  combination  by  and adds t h a t  t h e r e l a t i o n s h i p b e t w e e n home  stage,  evaluating  than  and household  exist.(1971:271).  Alden  marital  the life-cycle  approach,  and u r b a n / r u r a l  decisions  life  support  rates  mobility rates f o r Thus d u r a t i o n  f o rrenters  of p r i o r  in predicting  162 6 . 1 . 3 . 2 D I F F E R E N C E S BETWEEN M I G R A T I O N AND Prior on  the  s t u d i e s , based mainly  axiom  probability increases 456). but  of  raises  an  affecting  United  (Speare  this  issue,  that are  1 9 7 0 : 4 4 9 ) . On  residence  in that  where  is  a  result  on  the  h a v e on  the  related  intracity  indicators should who a  has  mobility  change  Rossi  oriented  of  that the  high  (1955)  decision  in  found to  area  moves  just  of  are  tenure' c h o i c e .  e i t h e r type  of  move  important  life  cycle.  Goldstien  found  that  1970:450).  job  as This  (1958;1964)  m o b i l i t y rates are who  This will  i n d i c a t o r s of as  population  ( 1 9 5 5 ) who (Speare  intracity  family  results  lines  related mobility is a  Thus the be  i n the  e x p l a i n the  segment  moves, and  period.  than  related factors  i n the  current  that  m o v e s may  demonstrated  limited  affect  impact  holding  of  help  will  This  Mueller  single metropolitan  of  renters  county  hand, Rossi  concern  they  and  the  household  1970:449,  market.  by  within a  place  for  motivated other  the  much d i f f e r e n t  job  based  factors  most moves a c r o s s  i f job  then  the  moves. L a n s i n g  1970:449). Thus,  likely  hold  single labour  (Speare  the  says  (Speare  seems t o  factors predominated  residence  that  were  in a particular  moves a r e  intracity  States  of  in a  city  shown  housing  change  staying  finds that  inner  i n Europe,  inertia  length  important  (1967) have  that  the  f o r homeowners  influencing those  cumulative a person  with  Speare  not  the  of  MOBILITY  make renters  due  to  frequent were  more  163 The  Speare  2300 Rhode found  Island  r e s i d e n t s oyer  9 percent  housing  while nearly half  6 . 1 . 3 . 3 M O B I L I T Y AND  aside  distinct through family  possibility  life  cycle  childless,  o f t h e moves were  life  cycle  cycle  normally  married  includes;  with children  separation  before  older married  situations  will  and of  t e r m i n a t e d by d e a t h ,  affect  behaviour  s h o u l d be a c c o u n t e d this  other  who e s t i m a t e d women b o r n (Speare  segment  and others ~  d i v o r c e , or  r e a c h m a t u r i t y . These of the household  f o r s e p a r a t e l y . The  57 p e r c e n t  i n 1920 e x p e r i e n c e d  never  never  of  a normal  unit  importance  i s r e v e a l e d by U h l e n b e r g  that only  1970:453).  have c h i l d r e n ,  children  w i t h no  (widowded,  o r d i v o r c e d ) . Some p e o p l e  their  married  not y e t i n school,  separated,  but never  pass  unmarried,  married,  marriage  i sa  a t t h e same a g e . T h i s  w i t h school aged c h i l d r e n ,  their  determinant  stage. This  i n school, and older unmarried  have  related to  since not a l l i n d i v i d u a l s  life  others marry  tojob  factors.  children  marry,  location.  AGE  the family  the family  married  forresidential  may a s k i f a g e i s a n i m p o r t a n t  from  p e r i o d . He  o f a l l moves were a t t r i b u t a b l e  or neighbourhood  One  a 20 y e a r  h i s t o r y of  t h e S t a t e were due t o c h a n g i n g  needs or p r e f e r e n c e s  changes,  and  evaluated the mobility  m o s t moves w i t h i n  housing Only  study  (1969)  Massachusetts life  cycle  1 64 Speare's the  well  younger  r e s u l t s ' d e a l i n g with  established  relationship stages  75 p e r c e n t  45-54, and r e m a i n s  age and l i f e with  cycle  even  that  as a person  grows o l d e r .  and  cycle  are independent  Chevan cycle  (1971) found  stage  married. first  i s affected  Speare  few y e a r s  considerably fact  that  notes  young m a r r i e d .  new  resettlement  have c h i l d r e n  their  during  mobility divorce  those  breaks  i n each  mobility  a r e on a v e r a g e  which  age  life  i n the  marriage  i s often  despite  older  needs  rates  with  the marriage  the  than  initiates  a  not completed  increase  couple  and u s u a l l y  the husband's career  i n much  decline  plans  to provide  housing  f o r t h e two next  life  t h e same w a y t h a t t h e a g e . H o w e v e r , when d e a t h o r union,  i s substantially increased. i n a l l three  that  effects.  t h e young u n m a r r i e d  housing  decline  rates  suggests  t o a new home. A s t h e m a r r i e d  The m o b i l i t y  stages  normally  of marriage i s  and the f a m i l i e s a b i l i t y  increases.  moving  than  t h e same p e r i o d  stabilize  cycle  (p. 453) that  process move  This  mobility  I t seems t h a t  the first  they  cycle  by age and t h e number o f y e a r s  t h e young m a r r i e d  the  with  that  after the year  higher  thereafter.  when t h e l i f e  i n the order  stage  as t h e age  stable  occupied life  among t h e  d o n o t h a v e t h e same  mobility  are arranged  a n d a g e show  Mobility i s high  age groups and d e c l i n e s  group approaches Also,  pattern.  mobility  of the older  the p r o b a b i l i t y of In Speare's  age g r o u p s , t h e  study  165 probability  of moving  double  of t h e o l d e r  that  the marriage mobility  bond  both  Earlier  when  i t i s formed  i t was m e n t i o n e d  that  both  important  independent  his sixlife  effects  i s about  concludes  i n generating  a n d when  i t i s broken.  Speare's  as l i f e  results  cycle  stage  on m i g r a t i o n . W i t h i n  stages there  i n migration rates  by age  variation  i s g r e a t e s t f o r t h e young m a r r i e d and t h e  married  w i t h s c h o o l age c h i l d r e n .  earlier  than  average  and those  earlier  than  average  appear  than  average,  have c h i l d r e n must c o n t r o l Speare to  a certain  prior  later  have  f o r both controls  lower  have  that  who  cycle  later  rates.  and  Thus one  stages.  two i n d e p e n d e n t  As one w o u l d  effects  the probability  expect  of mobility.  does not h o l d f o r m o b i l i t y  establish  a new r e s i d e n c e r e g a r d l e s s o f p r i o r  the recently  This  i n the year of  There  not  marry  mobility  marriage.  in  The  children  marry  mobility  age and l i f e f o r these  four  e x t e n t when h e e v a l u a t e s t h e d u r a t i o n o f  decreases  relationship  Persons  t o have h i g h e r  residence and m o b i l i t y .  duration  (1970:454).  that  while those  have  i sconsiderable  variation  rates  that  factor  that  age as w e l l  cycle  unmarried  married. Speare  i s an i m p o r t a n t  indicated  of  f o r the older  seems t o be a h i g h p r o p e n s i t y t o  married case.  move d u r i n g t h e y e a r  probability  that  they  immediately  following  I f t h e new  of marriage  would  move  family  unit d i d  t h e r e was a h i g h  i n the years  the marriage.  residence  1 66 6 . 1 . 3 . 4 P R I O R TENURE C H O I C E AND M O B I L I T Y Speare performs a s i m i l a r tenure and  choice  on m o b i l i t y . T h o s e  just married  results  showed  to moving Speare  i f they  finds that  there  between m o b i l i t y r a t e s  groups. mobility  In contrast rates  with  all  age groups.  and  renters  years  This  mobility around, In renters there  that  factor  author  aged  were  forrenters i n  f o rboth  10 t o 19 y e a r s over  65 w i t h  result i s that  mobility rate  owners  previous  less than  4  mobility rates f o r  no m a t t e r  rates  f o rrenters  i n d i s t i n g u i s h i n g movers that  few t i e s  a r e two f o r c e s  (1970:455).  t o be a n from  the effect i s that  choice,  r e s u l t Speare  to a specific holding  stayers.  expected  and not t h e other  p o s s i b l y be c o n s t r u e d  explaining this  what t h e  are considerably  home o w n e r s h i p a p p e a r s  believes  as could  constant  and these  a f f e c t s tenure  have  of residence  to this  18-29 w i t h  general  the lowest  important  previous  decline i n  of residence  He c o n c l u d e s  of  relationship  he f o u n d a g e n e r a l  home o w n e r s a r e v i r t u a l l y  below  of the household.  i n a l l age  duration  prior  residence.  Speare's  duration  early  home o w n e r s  and r e n t e r s  prior  married  i n owned homes  and d u r a t i o n  Exceptions  aged  because  i s no s i g n i f i c a n t  f o r ever married  residence,  lived  were n o t t h e head  of p r i o r  i n t h e never  were n o t e v a l u a t e d  that  they  residence  evaluation  from  the results.  suggests  location.  a person  way  that Generally  to a location;  167  economic  and  social  non-existant with  one  of  broken  shown t h e s e  1 9 7 0 : 4 5 5 ) . On  which  the  a house  are  and  social  social  prevents  home  the  locational  bond  who  accept  home o w n e r s h i p  the  of  local  home o w n e r s h i p . off a  because as  labour  market.  is built  Lansing  and  moving  time.  route are  average  even  the  prior  bond  likely  t o be  Thus  run  when  those  to  found  i f  another  Speare  consistently  found  higher  times  more  home o w n e r s , a n d  2-3  times  more  location  of  i s traded  4-5  one  the  benefits  (1967)  mobility  where  off  that  be  and  risks  r e n t e r s were  f o r r e s i d e n t s of years  buying  trading  found  to total  renters.  CYCLE  over  Mueller  for  AND  up  i t would  regards  likely  of  economic  mobility  in mobility  6 . 1 . 3 . 5 AGE  an  local  t o move t h a n  authors  (Speare  c o s t s and  I t i s only  differences  20  process  longer  likely  not  This contrasts with renting  the  On  the  f o r the  In  made  several  mobility  home o w n e r was  be  increase with duration  forming  the  freedom  i s purchased.  are  future mobility  hand,  thus  almost  usually  ties  involves transaction  immediate  are  However,  b o n d s do  other  ties  movement can  w i t h moving.  residence which  selling  Economic  for renters,  months n o t i c e ,  necessarily have  ties.  f o r more  than  (1970:457).  Y E A R S M A R R I E D S E P A R A B I L I T Y FROM  LIFE  STAGES Speare  appear  to  confused.  notes  that although  represent Persons  of  the the  age  and  same c o n c e p t same a g e  but  life  they  cycle  s h o u l d not  of d i f f e r e n t  be life  1 68 cycle  stages are often  behaviour can  a s was p r e v i o u s l y  be s a i d  different revealed marry the  that  ages  late  exhibit  appear  needs  early  pointed  different  mobility  mentioned  result  of t h e i r  mobility  cycle  but of  rates. that  fewer  This i s  those  who  moves i n  housing to their earlier.  t h o s e who m a r r y  r e s o u r c e s , on t h e a v e r a g e ,  their  life  t h a n d o t h o s e who m a r r y that  in their  out. Generally i t  t o make c o n s i d e r a b l y  due t o t h e f a c t  provide  different  o f t h e same  process of adjustment  financial  housing needs compared  late  with  This  have  may  more  which t o  t o t h o s e who  marry  (1970:457).  6.1.3.6 L I F E The  purchase  C Y C L E S T A G E S AND  literature  household  life  understand  an  extensive  housing  conditioned  as a major  evaluation  paper  factor  i s that  life  and Urban  attempt undertook  cycles  Assistance  was a m a j o r  of Housing  Development  i n an  of housing c h o i c e s  the Housing  on t h e  i n t h e home  (1976)  of household  This experiment  of P o l i c y  McCarthy's  so f a r p l a c e s emphasis  the structure  U.S. D e p a r t m e n t  HOME OWNERSHIP  Kevin McCarthy  c h o i c e s from  Experiment.  Office  cited  cycle  decision.  to  the  persons  by t h e e a r l i e r  changing be  quite  and  Supply  undertaking of Development,  and R e s e a r c h . The theme o f  housing choices are powerfully  by t h e d e m o g r a p h i c  configuration  of the  household. The conform  life  cycle  stages used  i n the McCarthy  t o those of t h e demographic  studies  study  mentioned  1  earlier.  This extends  research  that  3 6  from the e a r l i e r  relates  r e l a t i o n s h i p between t h e l i f e consumption, analysis, for  and  builds  s t a g e . He  cycle  3 8  of and  the  housing  on t h i s by d e v e l o p i n g a cycle  consumption  McCarthy,  s t a g e s , and  in his  classification  shows  how  r e l a t e d h o u s e h o l d c h a r a c t e r i s t i c s v a r y by  then examines d i f f e r e n c e s  consumption  3 7  cycle,  local mobility.  household l i f e  consumption  demographic  the v a r i a b i l i t y  p a t t e r n s t o the household l i f e  69  by l i f e  cycle  s t a g e and  in current  housing  income.  found  He  r e s i d e n t i a l change i s a means by w h i c h h o u s e h o l d s housing consumption  t o meet c h a n g e s i n t h e i r  change  family  circumstances. The  McCarthy  descriptive  analysis  analysis  cross-tabulations.  i s based p r i m a r i l y  generated  e x p l o r e d w i t h a two model.  The  through  In h i s appendix  between h o u s i n g t e n u r e , l i f e  cycle  the  cycle  relationship  s t a g e , and  stage generalized  importance of l i f e  on  least  income a r e  squares  stages i s again  confirmed.  3 6  3 7  McCarthy  L a n s i n g and K i r s h ,  David, 3 8  1976:2 1957;  L a n s i n g and M o r g a n , 1955;  1962  Speare,1970;  Pickvance,1974.  C h e v a n , 1971; G u e s t ,  1972;  and  and  1 70 The is  concept  based  heads, the  of l i f e  on t h e m a r i t a l  the presence  for this  importance defining  cycle The  cycle  in  do n o t i n c r e a s e life  household  housing  that  between  change  over  used i n  demand.  and economic  Second,  determinants  the l i f e  cycle.  the stage of the  m o n o t o n i c a l l y over stages r e f l e c t  these  life  stages.  significant  generally  t h e demographic life  cycle  that  affect  changes  reflect  household  throughout  arrives,  on t h e  occurring  p r o g r e s s i o n and t h e social  income.  and  when  household  A l t h o u g h men  lives,  t h e n many t a k e t i m e  economic  Emphasis i s  of  tend t o  t w o - t h i r d s of  a r e employed  to the labour force  light  changes  participation  their  child  age. In l a t e r  some  housing choices.  i n married households  return  yields  of the households'  affecting  employed  school  the  consistently  on h o u s i n g  reflect  women  but  First,  characteristics  social  and  has three  s t a g e s has been  on t h e l a b o u r f o r c e  members  (1976:5).  investigation  the families'  placed  i n the household, McCarthy  circumstances that  circumstances  stay  cycle  McCarthy  relationship  related  child.  McCarthy  needs and p r e f e r e n c e s .  The  during  household  systematically  the variables  family  and ages of  i n the literature  demand v a r y  Third,  status  approach  many o f t h e t r a d i t i o n a l of  by  of t h e demographic  the l i f e  documented  stages used  of c h i l d r e n  age of t h e y o u n g e s t  rationals  cycle  until  o u t away their  stages of the l i f e  the  from  work  children  cycle  first  reach  children  171  a r e o l d e r a n d b e g i n t o work w h i c h a d d s t o h o u s e h o l d i n c o m e . T h u s income r e a c h e s  its first  peak i n t h e s e c o n d  s t a g e where b o t h h u s b a n d a n d w i f e a r e u s u a l l y it  employed,  b e g i n s t o d r o p a s women b e g i n t o r a i s e c h i l d r e n , a n d  t h e n r i s e s a s women r e - e n t e r t h e l a b o u r f o r c e . The second  p e a k o c c u r s b e f o r e r e t i r e m e n t when b o t h  parents  and c h i l d r e n a r e g e n e r a t i n g i n c o m e . Income a n d h o u s i n g independent.  requirements  are f a i r l y  When one s p o u s e l e a v e s t h e work f o r c e t o  r a i s e c h i l d r e n , average  household  income d e c r e a s e s . I n l a t e r i n t h e same d i r e c t i o n ;  size  increases while  years both tend t o i n c r e a s e  income a n d h o u s i n g  consumption.  D u r i n g t h e e a r l i e r y e a r s a m a r r i e d c o u p l e may n o t h a v e the f i n a n c i a l  r e s o u r c e s t o s a t i s f y h o u s i n g n e e d s . One  would then expect  t h a t y o u n g m a r r i e d c o u p l e s who have  w o r k e d f o r o n l y a few y e a r s a n d n o t a c c u m u l a t e d substantial  s a v i n g s may be i n c l i n e d t o r e n t , w h i l e n e w l y  m a r r i e d c o u p l e s about t o r a i s e c h i l d r e n  t h a t have worked  for a s u b s t a n t i a l p e r i o d of time b e f o r e marriage and accumulated  substantial  s a v i n g s w o u l d be i n c l i n e d t o  own. T h i s s u p p o r t s t h e c o n c e p t m a r r i e d h a v e an i n t e r a c t i o n The  normal  distinctly and  late  life  that' age and y e a r s  effect.  c y c l e of tenure choice i s  r e v e a l e d by t h e M c C a r t h y i n v e s t i g a t i o n .  Early  s t a g e s i n t h e c y c l e have a l a r g e p e r c e n t a g e o f  renters while the mid-stages, households,  with larger  have a h i g h e r p e r c e n t a g e  family  o f o w n e r s . The  172 distinction  between  becoming c l e a r e r introduction than  tenure  i n t h e urban  renters  housing  single  the others  90% l i v e  household  rent their  i n apartments.  s m a l l space  requirements,  and  demographic  and o c c u p a t i o n a l  Homeownership reaches  in  that  family  units.  houses.  ownership  With  less  homes, a n d o f t h e i s consistent with low  incomes,  instability/mobility.  owners  Also at this (about  with older  (about  90%) a r e  stage, of  those  60%) l i v e  i n similar  retirement the incidence of  and r e n t i n g  of s i n g l e  family  decline.  Here  and  10% o f a l l r e n t e r s l i v e  only  that  95% by t h e o l d e r c o u p l e  r e n t a m a j o r i t y o f them  housing  with the  found  relatively  stage. Nearly a l l these  single  type i s  heads a r e  This  the  children  market  of condominiums. McMarthy  7% o f a l l y o u n g  homeowners;  c h o i c e and housing  45% of a l l households  homes b e g i n s t o  own t h e i r  i n single  own  homes  family  houses.  6.1.3.7 L I F E  C Y C L E S T A G E AND  McCarthy dealing stage and  generates  some  with tenure, housing  (1976:12).  During  FINANCIAL  interesting structure,  t h e peak y e a r s  income most a l l h o u s e h o l d s  houses,  cycle  stage  housing  live  y e t few s p e n d a l l t h e i r  residence.  observations and l i f e  cycle  of household  in single  adult years  appear  t o be l e s s  those  distinguished  i n such  by d i f f e r e n t  preferences. McCarthy  by  a life  different  resources f o r suggests  size  family  A l s o , r e n t e r s a n d h o m e o w n e r s i n t h e same  p r e f e r e n c e s than  satisfying  RESOURCES  that  1 73 households  i n the middle  apartments  would  but  can  not  income as cycle  afford  household,  parallel  as  space.  analysis  finds  type  is likely and  similar  differentiating  cycle, than to  be  tend  household  those  who  younger t o be  potential factor  that cover  within  life  given  housing  result  strong cycle  stages owners  stages  of  the  tend  in life  t o be  older  renters.  Thus, at  each  pattern than  to their  at  peak  McCarthy  lifetime  concludes  stage  that  each  life  cycle  indicates  that  owners a r e  renters  there are  in a l l life  some w e a l t h  cycle  downgrading  age  In  one  the  more stages.  This  involved  in  later  have  to  stages,  inclined  once c h i l d r e n  is  between  enough e q u i t y  homeowners seem l e s s  owners  s t a g e , and  impacts  have t o accumulate  tend  earnings  f o r income d i f f e r e n c e s  down p a y m e n t c o n s t r a i n t s .  by  a  a  than  more p r o s p e r o u s economize  regression  both  finds  the  ground  s t a g e s , owners  households the  is a  are  l o t of  in  in older  accounts  showns t h a t  age  life  children  stage  c h o i c e of  early  over  income w i t h i n  also  the  two  of  renters;  renters  prosperous  role  home  are  (1976:14).  owners and observed  In  a  He  h e a d s who  closer  that  the  in that  tenure.  family  the  t o consume a  v a r i a t i o n of  factor  renting  single  number o f  through  (1976:14).  to Speare  predicting  the  tend  to affect  tenure  in a  stage  preferences varies  with  McCarthy the  cycle  I t seems t h a t  on  children  oriented  t o be  this.  a constraint  stages  stage  prefer  life  the  to  left  home.  174 6 . 1 . 3 . 8 HOUSING S T R U C T U R E I M P A C T S ON Bossons  (1977) n o t e d ,  demand m o d e l s , allocation tenure,  of  and  in his criticism  that the market housing  i s not  resources  i f certain  housing  of  housing  efficient  under  both  needs are  in i t s  forms  t o be  of  satisfied  the c h o i c e of  tenure  be  limited.  McCarthy  single  houses v a r i e d  in their  spaciousness,  family  measured The  by  their  average  may  TENURE  number  number o f  family  h o u s e s was  houses  i t was  rooms  6.02;  5.22;  of  while  d w e l l i n g s i t was  multiple  unit  same  important mobility  this  occupied  rooms; and  i t was  would  3.43  be  tenure.  single  single  (2 t o 4  family  unit) in  large  rooms. A c c e s s  expected  reported that household  i s used  to  to follow  and  stage  higher  McCarthy between  of  the  shows t h a t t h e the  life  the  r e n t e r s and  and  single  close  for older couples  homeowners  documents  purchase  are  densities  largest  couples  D e n s i t i e s were  with children.  vary  (1976:16-17).  in densities  headed households.  couples  to  that these  o w n e r s among c h i l d l e s s  older  childless  densities  and  acceptable densities  cycle,  difference  fairly  households,  (1971:456-457). McCarthy  f o r r e n t e r s than  found  density is  of  to adjust housing  levels  result  the  that  4.17  in determining mobility  acceptable  are  space  in small  on  as  pattern. Chevan  by  buildings  outdoor  i n owner  in renter occupied  multiple  private  rooms, depending  found  This  homes l a r g e r  and  rather  suggests than  they  1 75 need a t growth to  the  move t o a d j u s t  smaller This  older  could  social  be by  ties  The more  space  t o new  due  and  data  to the  axiom  finds  cycle  per  w h i l e the  that  that  life  based  cycle.  mainly  on  pay  more  as  Because  d i s c u s s e d by  impact A  on  of  t o move  to  children. inertia  i t pertains  to  life-cycle income;  to  the  In  stages,  the  more  income  and  ratio  housing  needs not  fact,  density  for  by  life  type  of  unit  varies  by  income  expenditures are  income.  income w i l l  Once  space  impact  on  i m p e r f e c t i o n s i n the c a p i t a l  Bossons,  renters  to vary mainly  size  are  housing  f o r h o u s i n g and  i s found  t h e r e s h o u l d be  an  market,  income  tenure.  general conclusion  adjustments household  their  to changing  (1976:18).  requirements are determined tenure.  other  at a l l stages renters  This suggests space  the  cumulative  within  explains rent  At  likely  commitments.  room m e a s u r e  stage, which  chosen;  of  i s u n a f f e c t e d by do  household  reluctant  (1970:456-457) as  the m o t i v a t i n g f a c t o r  persons  needs. are  t o move t o a d j u s t  renters  future  the d e p a r t u r e of  economic  consumption  prosperous  housing  indicated  McCarthy  of  c o u n t e r p a r t s a r e more  owner h o u s e h o l d s  Speare  inclined  needs.  renting  homes a f t e r  discussed  not  in anticipation  while their  extreme,  is  time  follow  through  consumption  the  natural  i t s life  compels  i s that  p r o g r e s s i o n of  cycle.  a household  consumption  Changes  in  to reassess  a household  the  176 suitability  of  income e n a b l e s even  i n the  i t s current housing. a household  absence  preferences,  of  t o buy  changes  or  while a decreases i t s housing  (McCarthy  1976:20). L o c a l m o b i l i t y for this  6 . 1 . 3 . 9 M O B I L I T Y AND McCarthy Speare  declines life  stages. This  development However, stages. mobile this in  of  At  every  than  of  space  Almost  70%  rental  units,  strong  adjustments.  i n the  they  later  likely  cycle  late  to  stage  stages  of  and  Mobility  grow  through  and  comes up  stage  one  life  cycle  stages.  readjust in  renters are  later  more  influence  in rental  naturally  These changes occur  limit  relative  moves f o r v a r i o u s  (unmarried)  units.  a  space  mid-stages.  w i t h some  while another  the  general  while having  during the  future probability  resources  t o Chevan  represents the  more  life  similar  c a u s i n g homeowners t o have e x c e s s  and  stages  households  major  process.  McCarthy documents household cycle  i s the  downward  o w n e r s . T r a n s a c t i o n s c o s t s may  early  shortage  force a  expenditure  r e n t e r s as  stability  renters are  behaviour  the  to mobility  f o r owners and  cycle  housing  TENURE  obtains results  i n regards  rent better  i n income can  to adjust  mechanism  i n c r e a s e of  i n the u n d e r l y i n g  household  adjustment  An  20%  interesting moves were  were  to  form  life  results. between  new  Households c o n f r o n t i n g the  of  changes  their  i n stages  in composition  c o m m i t m e n t s by  two  and  and  renting.  t h r e e where  the  1 77 proportion stage all  of r e n t e r s becoming  three  (young  moves e n t a i l  over  a change  households children there  own  from  rental owned  late  unit  as w e l l  stages  exceeds  and  owned homes. By s t a g e  five  95% of a l l  s i x (where  (where e l d e r l y  become  single)  as those  among  the probability  from  rentals.  In  of moving  that of a household  fact  into  moving  a  into  accommodation. Reasons  tenure  f o r m o v i n g may  choice  be u s e f u l  since mobility  be d i r e c t l y  connected  t o tenure  from  McCarthy. Here,  25% i n d i c a t e d  circumstances; single  family  the primary  house,  are c l e a r l y  a change  space  factors  characteristics  and cheaper tied  #2). Here  housing  life  from  younger  children.  This  group a l s o  responses  f o r space  cycle  choice  and q u a l i t y  a as  (5%) or moves  f o r moves  stages (see change  and older couples  represented  by  quality  location  ( 7 % ) . The r e a s o n s  70% of t h e t e n u r e  were  reasons  f o r ownership,  or b e t t e r were  seems  i n family  (10%), involuntary  to the family  responses  c h o i c e . These  a desire  o r more Other  mobility,  information collected  40% mentioned  reason.  neighbourhood  survey  i n determining  or expected  were documented  table  t o owning,  own h o m e s . By s t a g e  l e a v e ) and seven  55% of  i s an- i n c r e a s e i n t h e p r o p o r t i o n o f m o v e s  these  (9%),  renting  w i t h s c h o o l age c h i l d r e n )  their  owned t o r e n t a l  to  w i t h young c h i l d r e n )  7 0 % o f moves a r e i n t o  (an o l d e r c o u p l e  at  couples  homeowners i n c r e a s e s . A t  with older  61% of the  changes.  This  supports  178 the to  hypothesis that the life  cycle  tenure choice i sd i s t i n c t l y  related  stage.  6 . 1 . 3 . 1 0 THE MCCARTHY L I F E CYCLE STAGE AND  TENURE CHOICE  MODEL The several of  McCarthy  f a c t o r s . These  persons,  were used  status  used. the  from  reflects  left  was i n c l u d e d  o u t because  primary  rather  would  and whether t h e  as a  supplementry i n c o m e was a l s o  head was m e a s u r e d by and c u r r e n t  enrolment  of t h e weakness oft h e  model  show l i f e  Employment  than  on l i f e  h e a d was f o u n d o f t h e spouse  the expected cycle  likely  however, once a f a m i l y  l e a v e t h e work  positive  trends indicated  a c h i l d l e s s c o u p l e would  renting  stage,  cycle  stage  c h a r a c t e r i s t i c s . The employment  of the household  results  cycle  d i f f e r e n t tenure preferences and i s independent  insignificant. sign  variables  tests.  results of this  other household  status  number  head, and employment  and previous years household  were  The  dummy  life  i f applicable,  number o f y e a r s o f s c h o o l i n g ,  results  of  Also,  the household  Education of the household  status  of  income.  size,  p l a n s t o move d u r i n g t h e c o m i n g y e a r . T h e  number o f c h i l d r e n variable,  i s b a s e d on  household  of the household  o f t h e spouse  household  include;  and household  to indicate  employment status  t e n u r e c h o i c e model  force  t o be had a negative, sign. that  The e a r l i e r both  be w o r k i n g a n d  was i n i t i a t e d  until  members  thechildren  the wife were o f  1 79 school  age  negative early  by  impact  part  stages. he  and  of  the  time  spouse family  may  of  model a l s o  impact  on  relationship.  more p o p u l a r . The the c o s t of  Since  not  The  in  i n the  the later  result  i f  specific  exceed  to  by  life  some o f  this  The renters  positive  argues of  that  current  s h o r t run, but y e a r s , one  household  changing  the  investment; risk  time  with  current tenure  status.  expect  location  transaction  than  loss.  budget. and  account  for  choice. that  owners.  p l a n s are not  T h i s may up  be  even  an  in  to three  needs to on  an  true  a high probability  or housing  costs,  related  tenure  f o r p e r i o d s l o n g e r , say would  doubt  indicates  mobility  becomes  t o age  may  found  the  limited  with  mobile  i t takes to break  of c a p i t a l  no  a  relationship  t o be  as  renting  i s related  variable  significant  that  are  relationship  a r e more l i k e l y  indicator  within  this  expected mobility  McCarthy  five  children  of  have a l s o  are  for this  number  and  studies  results  children  income,  the  a threshold  reasons  raising  that  a positive  Other  General  t h e number o f  possibly  a  but  where the  finds  has  tenure choice.  number o f c h i l d r e n  to  cycle  i s expected  t e n u r e c h o i c e were t e s t e d  i n the household  the  life  a house.  have o b t a i n e d the d e s i r e d  minors  to  employment  own  sub-groups. McCarthy's  this  they would  separate tests,  characteristics cycle  of  McCarthy  undertook  this  of  a  occur  ownership  p l u s some a d j u s t m e n t  Thus, expected m o b i l i t y  over  for the  180 break more  even  holding  impressive  appropriate  time  frame  may by  the discussions  6.1.4  cycle  f a c t o r was  This  i fthe  used.  t h e impact of  i s difficult  i n the literature  and t a x b e n e f i t s  be c l o u d e d life  for this  i s small.  v a r i a b l e , and  have been o b t a i n e d  r e s u l t s indicate that  income on t e n u r e  effects  i s the relevant  r e s u l t s may  McCarthy's  given  period  to explain  on t h e t h r e s h o l d  o f o w n i n g . The income  by t h e f a c t t h a t  there  was no  result  separation  stage.  I N T E R D E P E N D E N C E ON  THE TENURE  C H O I C E AND M O B I L I T Y  DECISION 6.1.4.1 It  INTRODUCTION i s the purpose  household  tenure  interrelated. Pickvance been  of t h i s  choice  This  section  and the migration  concept  by Q u i g l e y  decision are  has been e x p l o r e d  ( 1 9 7 3 , 1 9 7 4 ) a n d Krumm  reviewed  t o show t h a t t h e  (1984),  and Weinberg  and has a l s o (1977).  6 . 1 . 4 . 2 M O B I L I T Y , L I F E C Y C L E S T A G E AND HOUSING Quigley  and Weinberg  together  i n their  material  on i n t r a - u r b a n  back  to Rossi  review  (1977) p u l l and synthesis  residential  (1955:9) they  by  several of  ADJUSTMENT ideas  research  mobility.  Referring  note  "the major f u n c t i o n of m o b i l i t y i s t h e process by w h i c h f a m i l i e s a d j u s t t h e i r h o u s i n g n e e d s t h a t a r e g e n e r a t e d by s h i f t s i n f a m i l y composition t h a t accompany f a m i l y l i f e c y c l e stages."  181 This  concept  of m o b i l i t y  a n d t h e demand  associated  with the l i f e  widespread  agreement amongst  according explored  to Quigley  thesis  also  choice  literature  (1977:50), of t h i s  relate  i n much  e x p l o r e s . They n o t e  seems t o be i n  the existing  section  and Weinberg  t o tenure  stages  and Weinberg  i n the previous  Quigley mobility  cycle  changes  and as  chapter.  the concept  t h e same way  of  that  this  that  " t h e r e i s s t r o n g r e a s o n t o e x p e c t m o b i l i t y t o be a s s o c i a t e d w i t h any changes i n household d e m o g r a p h i c s t h a t s h i f t t h e demand f o r h o u s i n g s e r v i c e s " and "households t h a t can p r o j e c t major c h a n g e s i n h o u s i n g d e m a n d , o r who c a n f o r e c a s t t h e t i m i n g o f a. j o b - r e l a t e d m o v e , d i s c o u n t losses i n utility over a s h o r t e r time. This s u g g e s t s why, f o r e x a m p l e , h o u s e h o l d s t h a t e x p e c t t o move f r e q u e n t l y t y p i c a l l y c h o o s e rental units" (1977:58). Thus t h e r e the  life  services  seems t o be a l o g i c a l  cycle  stages  and i t s r e l a t e d  with expected  mobility  Combining mobility study,  Pickvance  appears  life  housing  investigations  path  analytic  original  (life  cycle  preferences,  first  relationships  i n c l u d e a c a s u a l model  approach  t o the problem  he s u g g e s t s  of m o b i l i t y ; position  housing  and  (1973),  and a  In h i s  that there are  household  of  mobility.  (1974).  five  characteristics  and t e n u r e ) , housing  neighbourhood  characteristics,  the inter  f o r housing  empirical  tenure, and r e s i d e n t i a l  proposition  determinants  i n an  between  choice.  t o be one o f t h e  to investigate  His  demand  and tenure  and tenure  researchers cycle,  relationship  v a l u e s and  accessibility  stock c h a r a c t e r i s t i c s ,  and  182 local  government  availability.  policy  He  then  possible  variables;  approach  i s based  household and  (Pickvance  household  on  the  are a major  and  mobility.  impact  on  by  exist.  of  of  (1973) sees  The  income,  mobility  influence  tenure  purpose  rather  in this  early  on  seen  i s affected  of  and  the  each  housing  i s also  than  to  by  tenure  have  the  mobility  Pickvance  r e s e a r c h was  (1973) proposes between this  choice  is model and  p l a c e d on  Based  income and  Pickvance  early  relationship  age.  relationship  t e n u r e and  other  on  framework  i n h i s model  relationship  cases,  movers, a a  that  the  relationship.  a causality  under  assumption  characteristics,  mobility  emphasis  alternative  of  determinant  of  This  life-cycle,  Thus t e n u r e  a l l four.  to predict  discussion  may  (of age,  Housing  mobility.  Pickvance is  characteristics.  a direct  three household  converse  class  among  having  and  little  one  income a l l i n t e r a c t i n g  each  was  on  cycle  other  affected  and  life  and  other  a model  theoretical  P i c k v a n c e model age,  an  access  1973:280).  position,  tenure  develops  characteristics  tenure)  The  affecting  that  than  he  this  survey but  mobility  controls  one  for life  P i c k v a n c e hopes t o  (1973:288)  in this  way  there  in his  that relationship,  of  causality  It is this controlled  that  but  suggests  results  not  that  prior  i s shown  cycle  stage,  causal determine.  regard suggests  tenure  that  183  " s i n c e e x i s t i n g s t u d i e s d o n o t a l l o w o n e t o be c e r t a i n of the e x i s t e n c e of a c a s u a l path from housing tenure t o m o b i l i t y , i t i s worth noting t h a t two a l t e r n a t i v e s a r e p o s s i b l e . The c o r r e c t p a t h may b e f r o m m o b i l i t y t o h o u s i n g tenure, i . e . t h e more m o b i l e h o u s e h o l d s c h o o s e r e n t a l a c c o m m o d a t i o n . A l t e r n a t i v e l y , and t h i s i s more l i k e l y , t h e r e may b e r e c i p r o c a l c a u s a t i o n between h o u s i n g t e n u r e a n d m o b i l i t y . Abu Lughod suggests t h i s and even c l a i m s t o have e s t a b l i s h e d t h i s from her data." The  possibilities  Pickvance  discussed  here  (1974) where a p a t h  are further explored  analytic  technique  by  is  explored. In  the e m p i r i c a l study  specifically tenure on  based  with  This  and income w i t h  on t h e p r e m i s e  directly  that  on t e n u r e  first  conducive  separates  hypothesis to mobility  relationship  without  Various  d e s i r e d from whether  relationship  along direct  i s influenced t e s t s of and  reported.  expected  tenure  mobility.  (renting) i s  of other  variables.  documented  i n the past  of independence. According one s t u d y  of age,  the model  position  are performed  independent  (1974:76) o n l y  independence of t h i s  indirect  independent and  has been w i d e l y  the inclusion  Pickvance  asks  influence  As b e f o r e ,  life-cycle  he  housing  correlation  c h o i c e , and m o b i l i t y  and independence  Pickvance  casual  i t s possible  tenure.  by a l l f o u r v a r i a b l e s .  casuality  This  from  age and income e a c h have an  influence  The  or d i r e c t ,  i s apart  by P i c k v a n c e  of whether  i n f l u e n c e due t o t h e o b s e r v e d  life-cycle is  the question  has an i n d e p e n d e n t ,  mobility.  casual  addresses  presented  has looked (Biggar  to  at the  1971) a n d  184 since  desired  together casual  and a s s o c i a t e d  paths,  However, for  and expected m o b i l i t y with  the results  the Biggar  Turning mobility  offers  of t h i s  to Pickvance's  there  a large  grouped  number o f g r o u p e d  are not c l e a r l y  study  the interdependence  were  interpretable.  some p o s i t i v e  support  relationship.  results,  i s an i n d e p e n d e n t  i n terms of  effect  desired  of tenure  on  mobility. " T h u s we c a n s a y w i t h some c o n f i d e n c e t h a t r e n t i n g i s c o n d u c i v e t o d e s i r e m o b i l i t y when other variables are controlled" (Pickvance 1974:177). This in  result  part  suggests  affected costs  offers  prove  by d e s i r e d  support  a direct  tenure  choice  study;  from  of  that  and r e q u i r e d  Stronger  direct  tenure  holding would  rather  tenure  period  actually  still  results  of the Pickvance  opposed  t o t h e above d i s c u s s e d  be  from m o b i l i t y  to mobility.  relationship  costs.-  i f the Pickvance  what  study,  which  transactions  to minimize  relationship  choice  thesis  i s partially  due t o t h e  result  than  for this  choice  mobility  casual  a reciprocal  support  results The  exists  could to from t h e  possibility and t h e  i n terms of expected desired  mobility,  should  explored. When e x p e c t e d m o b i l i t y  relationship  i s still  i s considered  t h e above  s i g n i f i c a n t but not quite  as  strong. " T h u s we c a n h a v e some c o n f i d e n c e is conducive t o expected mobility  that when  as  renting other  185  variables  are controlled"  When t h e t w o r e s u l t s  (Pickvance  a r e combined  1974:178).  Pickvance  concluded  that "when o t h e r v a r i a b l e s a r e c o n t r o l l e d , renting l e a d s t o both g r e a t e r d e s i r e d m o b i l i t y , and t h e r e f o r e t h e r e l a t i o n s h i p between t e n u r e ( r e n t i n g ) and m o b i l i t y i s not a s p u r i o u s one" (1974:178). Results  of t h e model d e a l w i t h those  expected  mobility.  The  of  from  cycle  those  position and  life  and m o b i l i t y ,  This  associated  causality  last  cycle  mobility,  relationship,  the direction  of  a few d r a w b a c k s w h i c h  suffers from  to test  or degree  was t h a t  variable  (above  factor.  The f i n a l  from  further  a r e a s . The  and m o b i l i t y  utilized  life  study  drawback  first  research i n this drawback  the effect  support  from  the  and limitation  of the d i r e c t i o n between  a l l perspectives. A  have  of  tenure  second  a g e w a s o n l y c o n s i d e r e d a s a dummy  o r below  35) r a t h e r  drawback  of these  was t h a t  as well  has been  than  as a  life  cycle  by t o d a y s  disadvantages  f o r an i n d e p e n d e n t  and expected  relationship  was  of interdependence  were somewhat p r i m i t i v e  in light  tenure  and t e n u r e ,  i s not determinable.  the study  offer  In this  to  relationships  of interdependence  become a p p a r e n t  Even  position  of t h e method of a n a l y s i s ,  causality  choice  do s u p p o r t  age and t e n u r e , age and  t e n u r e and m o b i l i t y .  because  of  results  pertaining  stages  standards.  the Pickvance  relationship  as desired  further  continuous  between  mobility.  e x p l o r e d by more  study  This recent  186 studies  that offer  tenure/mobility  stronger  support.and  insight  relationship.  6 . 1 . 4 . 3 THE J O I N T D E C I S I O N OF TENURE AND Ronald nature  Krumm  (1984) e v a l u a t e s  of household  research  generates  research  in this  that  those  either  decisions joint  The considers  i s generated  migration  decision.  shows t h a t  1977/78 t i m e Similar probabilities decision  their  i f the  data  that  the period i n  The  first  probabilities  and a l s o w i t h t h e f o r tenure  does not e x i s t  c h o i c e by over t h e  frame. estimates  f o rthe joint  of tenure  were developed.  independence  from  and marginal  The e s t i m a t e s  on  place are evaluated.  i n each year,  independence  effects  change  (1984:259).  of evaluation a r e taken. the joint  -to a f f e c t  location  and a f t e r  taken  indicate  a r e masked  independently  status before  choice  f o r further  findings  residential  These e f f e c t s  result  estimates  the tenure  implications  or augmenting  m i g r a t i o n c o u l d have  approach  year  choice  decision  and m i g r a t i o n . H i s  that a r e often thought  a r e examined  tenure  MOBILITY  the joint  The e m p i r i c a l  have o f f s e t t i n g  Two a p p r o a c h e s  of  area.  tenure  joint  choice  important  probabilities.  decisions  which  tenure  variables  or both  to the  between  choice These  these  and marginal  and the m i g r a t i o n results  do n o t support  two d e c i s i o n s .  187 6.1.4.4 C A U S A L I T Y OF TENURE AND M O B I L I T Y The  second p a r t  question of  of whether  the decision  o f t h e a n a l y s i s Krumm a d d r e s s e s t h e the migration  t o change  tenure  decision status  i sa result  o r whether  decisions  are affected  i n a common way b y o t h e r  Functions  representing  both  as  well as migrating  mobility  and tenure  are estimated. choice  decision,  through  dependent  on e x p e c t e d  the of the  net benefit migration costs  functions  joint  status  j o b tenure  head, h o u r l y head's past  function, i s  function.  The n e t b e n e f i t  t o tenure  a tenure  choice  from  through  change. Thus  both  ofthe  possibilities in These  include  for each of t h e marginal  tenure  possibilities. i n the estimation (in years),  m o b i l i t y a s measured  of the wife,  the  number o f c h i l d r e n  total  income, h o u s e h o l d  rates  of the household  a dummy  for  dummy v a r i a b l e ,  status,  years of  the working  status of  i n the household,  household  per-capita for  education,  by t h e number o f s t a t e s  for marital  education  include  age o f t h e household  wage o f t h e h e a d , a r a c e  i n , a dummy v a r i a b l e  wife,  the  as generated  p r o b a b i l i t y are estimated.  used  represent  of owning  f o r the various  probabilities  of owning  The t e n u r e  the the interdependence  and migration  present  with  factors.  migration  i stied  Parameters  Variables  lived  of migrating  capture  terms of t h e i r the  future  function  These  decisions.  the net benefit  associated  decisions.  the net benefits  both  income, m a r g i n a l t a x  1977 a n d 1 9 7 8 , c h a n g e i n  188 hours  of time  o f f work  number o f h o u s e h o l d and of  region  studies.  household  The  with  The  main argument that  decision  The for  analysis  the j o i n t  migration  characteristics each  have  here  alter  (Krumm  of  while not  over  job tenure  change  household terms  First,  the choices  The a change marital All  decreases. Also,  second  status,  both  with  education  periods  Marriage  but  i s found  f o r ownership.  and tenure  as the above in  absolute  the e f f e c t s of  to increase  The  include  and employment  these c h a r a c t e r i s t i c s are s i g n i f i c a n t  a preference  increases,  c h a r a c t e r i s t i c s . These  wife's  As  ownership.  set of r e s u l t s deal  i n household  estimation.  involved.  t h e p r o b a b i l i t y of  towards  head  a g e , o r wage  i n either d i r e c t i o n decreases  is a shift  and t h e  household  and not m i g r a t i n g over  outcomes  the p r o b a b i l i t y of  head c h a r a c t e r i s t i c s i n c r e a s e ,  there  costs  household  ( i n years),  the p r o b a b i l i t y of r e n t i n g  status  the  or  locations are  two p e r i o d s  probabilities.  two p e r i o d s  migrating  site  on  changes i n  o f r e s u l t s shows a number of  s i m i l a r r e s u l t s on  over  i s that  each  1984:263).  any of t h e s e c h a r a c t e r i s t i c s i n c r e a s e owning  urban/rural  but based  the benefits  in explaining  tenure choice  decision  i n the  f o r i n c l u s i o n of  a l t e r n a t i v e residence  an e s s e n t i a l i n g r e d i e n t migration  reasons  are not e s t a b l i s h e d  conditions  associated  change  m e m b e r s , a n d a dummy f o r  o f t h e USA.  these v a r i a b l e s  prior  for sickness,  variables  status.  in their migration of  and  household  189 income well  and p e r - c a p i t a  as the marginal  income not, not  income  f o r both  significant,  t a x r a t e s . Ownership increases  those  that  migrate  and those  and t h e p r o b a b i l i t y of m a i n t a i n i n g migrating  respective  also  joint  increases.  have  a lower  housing  than  do o w n e r s .  tends  to decrease  owners  income  This  that  suitable f o rthe expansion  cycle,  periods  then  where  urban/rural  readjust  renting  housing  gains  that  o f demand f o r size  f o r both  households  period  obtain  of the family  for contraction  popularity. Regional  factors are also  do  the finding  of household  suggests  with  r e s u l t s and t h e i r  elasticity  Increases  that  as  ownership and  t h e p r o b a b i l i t y of moving  and r e n t e r s .  housing  These  p r o b a b i l i t i e s support  renters  life  are jointly  found  t o be  and  significant  determinants. The  Krumm  independence tenure  between  decision  decisions choice  (1984) s t u d y  the migration  does not e x i s t .  a r e found  decisions  exogenous  to play  and v i c e  variables  regional  influences.  study  This  decisions  cycle  r o l e on  points  out that  and household location  tenure  are t o a c e r t a i n extent  Various  exogenous  economic  variables  seem t o a f f e c t b o t h a n d a s Krumm p o i n t s  tenure  significant  and urban/rural  decision.  decisions,  Also,  and the  mobility  an i m p o r t a n t  life  that  decision  Location  versa.  include  characteristics,  mobility  demonstrates  choice  and  t h e same  and demographic  t h e tenure and m o b i l i t y out research  on e i t h e r o f  190 these  two  related  a r e a s has variables.  to consider  the  other  and a l l  

Cite

Citation Scheme:

        

Citations by CSL (citeproc-js)

Usage Statistics

Share

Embed

Customize your widget with the following options, then copy and paste the code below into the HTML of your page to embed this item in your website.
                        
                            <div id="ubcOpenCollectionsWidgetDisplay">
                            <script id="ubcOpenCollectionsWidget"
                            src="{[{embed.src}]}"
                            data-item="{[{embed.item}]}"
                            data-collection="{[{embed.collection}]}"
                            data-metadata="{[{embed.showMetadata}]}"
                            data-width="{[{embed.width}]}"
                            async >
                            </script>
                            </div>
                        
                    
IIIF logo Our image viewer uses the IIIF 2.0 standard. To load this item in other compatible viewers, use this url:
http://iiif.library.ubc.ca/presentation/dsp.831.1-0095934/manifest

Comment

Related Items