Household characteristics and tenure choice in the U.S. housing market

Abstract

Introduction The matching of households and houses is at the heart of the operation of the housing market. Despite the extensive literature on the process of residential mobility and the underlying decision making on the one hand, and on the tenure choice process and the operation of the housing market on the other, empirical models that firmly link housing choice to the characteristics of households and their housing situation are still in the developing stage (Deurloo et al., 1988; Olsen, 1987). This article examines the matching of households and dwellings in the United States and explores some empirical techniques for evaluating the matching. In previous research (Dieleman et al., 1989) we identified and discussed two views of the housing market. On the one hand economists and some geographers (Bourne, 1981) have emphasized choice in the housing market as part of a competitive process where households are expected to maximize utilities subject to a budget constraint (Arnott, 1987: 974). Of course, because of budget constraints but also because of allocation rules and the composition of supply in a particular housing market choice is not completely free (Deurloo et al., 1990). So housing choice only partly reflects household preferences. Some economists have extended the income elasticity approach (McClennan et al., 1987) to argue that housing should be viewed as a collection of attributes or characteristics which are used to satisfy more basic consumption objectives such as shelter, comfort, aesthetics and accessibility. Age, size of household, and marital status all influence tenure choice independently of income or interactively with income. This research has provided a rich set of results on the possibilities of certain types of households achieving ownership and on the types of households to be found in certain types of dwellings. An alternative view of the housing market, propounded by a wide variety of social scientists, but especially sociologists and geographers, has emphasized the supply side of the housing market and in particular the provision of housing as part of the organization of society. In some cases the specific focus is on the way in which the structural mechanisms of capitalism produce housing distributions,