Determinants of Home-ownership in a Developing Economy: the Case of Korea

Abstract

The purpose of this paper is to present an empirical analysis of the determinants of home-ownership in a developing economy by employing a methodological framework that overcomes some of the deficiencies of existing studies. First, an analysis of household tenure decision behavior in developing countries provides a basis for making observations on major similarities and differences in household tenure choice between developed and developing countries. Second, the study offers an analysis of the relative importance of current income and permanent income. Third, a long-run price of housing services for an individual household and an indicator of housing shortage provide an explicit consideration of the effect of market conditions on individual decision units. Finally, the study includes a measure of household mobility to analyze its relationship to tenure choice.