|Title||Legacies of homeownership: Housing wealth and bequests|
|Publication Type||Journal Article|
|Year of Publication||2017|
|Journal||Journal of Housing Economics|
|Pagination||37 - 50|
|Keywords||Bequests, Homeownership, Housing markets, Older Adults, Wealth|
This paper examines the effect of housing price shocks during the recent housing boom and bust on the bequest behavior of older homeowners. Prior studies find that illiquid assets have a strong expected influence on bequests, which suggests volatile housing markets will alter household bequest expectations, particularly since housing is generally the largest share of household wealth. I calculate shocks to housing wealth as the deviation in values from their growth trend over the last three years, and I exploit the geographic variation in housing market volatility to explore the relationship between housing value shocks and bequest expectations over the housing boom and bust. I find that housing price shocks, and especially negative shocks, have a consistent influence on bequest expectations for homeowners, particularly for older homeowners, and for those without stocks. A complementary analysis of elasticities also reveals a larger influence of housing values on bequests than other forms of wealth.