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1University of Cambridge; 2University of Sheffield; 3University of Reading;
We study the effect of age at arrival on immigrants' homeownership probability using a dataset representative of the population resident in the UK in 2014-2016. Age at arrival has previously been found to play a significant role in immigrants' life outcomes. But while most papers study certain age groups and a limited number of geographies, we observe immigrants of all ages at arrival and the full range of countries of birth. Consistent with the literature, we find no significant difference between immigrants arriving under the age of 18 and native Brits when it comes to owning a home in later life, controlling for other factors. However, immigrants exhibit significantly lower probabilities of being homeowners the later they enter the country, and this pattern holds for most regions of birth. Only those from South-East Asia and Pacific who immigrate at later stages in their lives are significantly more likely to own their homes than otherwise comparable people born in the UK, while non-UK, Western European immigrants are most similar to the UK-born. The differences between age groups even largely exist when we compare first-generation immigrants with second-generation immigrants, whom we deem to be a better comparison group from a cultural perspective.
ID: 134 / A2: 2 Full paper or extended abstract Topics: Home ownership and mortgage access, Housing and cyclical dynamics Keywords: Home ownership, tenure choice, immigration, culture
The Housing Market Impact of Immigrant Preferences for Homeownership
Schubert, Gregor; Gorback, Caitlin
UCLA Anderson School of Management, United States of America;
The effects of homeownership on the American economy and local housing markets are much debated and the U.S. government devotes substantial resources to trying to affect the financial returns of different tenure choices. However, much of the research on homeownership is inconclusive, as homeownership, its determinants, and local economic health are often endogenous. We propose a new instrument for tenure choice: cultural affinity for homeownership. We focus on foreign-born U.S. residents and show that immigrants with a high homeownership in their country of origin ("HOCO") have higher homeownership in the U.S. as well: moving between the interquartile range of HOCO increases homeownership by 3ppt. Taking the data to the zip code level, we construct an instrument appropriate to measure HOCO's impact on local market-level homeownership, finding a zip-code level passthrough of 0.2-0.3. from the predicted HOCO effect to local aggregates. Finally, we use this instrument to show that homeownership, instrumented using cultural preferences, has the potential to stabilize local housing markets, as house prices and local population in high homeownership areas react less pro-cyclically to national shocks.
ID: 167 / A2: 3 Full paper or extended abstract Topics: Housing market segmentation, search, and sorting, Urban economics: other Keywords: Immigration; Media coverage; Homeownership; Home Media; US Media
How Media Coverage shape Immigrants’ homeownership Beliefs?
Wu, Yi1; Li, Donghui2; Tidwell, Alan3
1University of Reading; 2Shenzhen University; 3The University of Alabama;
This paper investigates the causes and effects of media coverage on the homeownership of immigrants in the United States housing market. Media coverage on the housing market leads to the creation, sharing and exchange of information over networks and virtual communities among immigrants and local natives, but there are differences across racial groups and generations. We document that: a) First-generation African and Hispanic immigrants rely mostly on positive local housing news from the U.S. media to make decisions on house purchases, while first-generation Asian immigrants rely on positive housing news from media in their area of origin; however, (b) second-generation Asian immigrants rely more on local housing news from U.S. media. Furthermore, we examine the heterogeneous effects of the characteristics of news media providers and the backgrounds of immigrants (e.g., income, education and employment) on homeownership. Immigrants will be influenced by the positive news from news supplier with international background, especially in the case of second-generation immigrants. Well-educated and employed immigrants will be affected primarily by the positive local housing-related news from the U.S. media. This paper provides practical information on the causes of immigrants’ homeownership from the perspective of information assimilation.