centre for microdata methods and practice

ESRC centre

cemmap is an ESRC research centre


Keep in touch

Subscribe to cemmap news

The Housing Stock, Housing Prices, and User Costs: The Roles of Location, Structure and Unobserved Quality

Authors: Jonathan Halket , Lars Nesheim and Florian Oswald
Date: 03 February 2020
Type: cemmap Working Paper, CWP5/20
DOI: 10.1920/wp.cem.2020.520


Which housing characteristics are important for understanding homeownership rates? How are housing characteristics priced in the rental and owner-occupied markets? And what can the answers to the previous questions tell us about economic theories of homeownership? Using the English Housing Survey, we estimate a selection model of the allocation of properties to the owner-occupied and rental sectors. Structural characteristics and unobserved quality are important for selection. Location is not. Accounting for selection is important for estimates of rent-to-price ratios and can explain some puzzling correlations between rent-to-price ratios and homeownership rates. These patterns are consistent with, among others, hypotheses of contracting frictions in the rental market likely related to housing maintenance.

Download the appendix

Download full version

Search cemmap

Search by title, topic or name.

Contact cemmap

Centre for Microdata Methods and Practice

How to find us

Tel: +44 (0)20 7291 4800

E-mail us