Housing Price Volatility and Downsizing in Later Life

TitleHousing Price Volatility and Downsizing in Later Life
Publication TypeBook Chapter
Year of Publication2010
AuthorsBanks, J, Blundell, R, Oldfield, Z, James P. Smith
EditorWise, DA
Book TitleResearch Findings in the Economics of Aging
Chapter12
Pagination337-379
PublisherUniversity of Chicago Press
CityChicago
KeywordsConsumption and Savings, Cross-National, Demographics, Housing, Retirement Planning and Satisfaction
Abstract

In this paper, we modeled several types of housing transitions of the elderly in two countries -- Britain and the United States. One important form of these transitions involves downsizing of housing consumption, the importance of which among older households is still debated. This downsizing takes multiple forms, including reductions in the number of rooms per dwelling and the value of the home. There is also evidence that this downsizing is greater when house price volatility is greater and that American households try to escape housing price volatility by moving to places that are experience significantly less housing price volatility. Our comparative evidence in suggests that there is less evidence of downsizing in Britain. Our results indicate that housing consumption appears to decline with age in the US, even after controlling for the other demographic and work transitions associated with age that would normally produce such a decline. No such fall in housing consumption is found in Britain, largely because British households are much more likely to stay in their original residence.

Endnote Keywords

Housing/consumption/cross-national comparison/downsizing/Mobility

Endnote ID

24150

Short TitleHousing Price Volatility and Downsizing in Later Life
Citation Key5231