Arnold, Lutz G. and Babl, Andreas (2014) Alas, my home is my castle: On the cost of house ownership as a screening device. JOURNAL OF URBAN ECONOMICS, 81. pp. 57-64. ISSN 0094-1190, 1095-9068
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This paper analyzes a model in which housing tenure choice serves as a means of screening households with different utilization rates. If the proportion of low-utilization types is small, there is a separating equilibrium at which tenure choice acts as a screening device: consistent with empirical evidence, low-utilization households buy a house, while high-utilization types rent. Otherwise, there is a pooling equilibrium. The reason why, contrary to standard screening models, a pooling equilibrium possibly exists is indivisibility of home ownership, which makes it a very costly screening device. Introducing partial ownership restores the standard results: non-existence of a pooling equilibrium and possible nonexistence of equilibrium. (C) 2014 Elsevier Inc. All rights reserved.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | ADVERSE SELECTION; IMPERFECT INFORMATION; ASYMMETRIC INFORMATION; INSURANCE MARKETS; CHOICE; MODEL; MAINTENANCE; COMPETITION; DEFAULT; RISK; Housing; Tenure choice; Asymmetric information; Screening |
| Subjects: | 300 Social sciences > 330 Economics |
| Divisions: | Business, Economics and Information Systems > Institut für Volkswirtschaftslehre und Ökonometrie > Lehrstuhl für Theoretische Volkswirtschaft (Prof. Dr. Lutz Arnold) |
| Depositing User: | Dr. Gernot Deinzer |
| Date Deposited: | 11 Nov 2019 14:41 |
| Last Modified: | 11 Nov 2019 14:41 |
| URI: | https://pred.uni-regensburg.de/id/eprint/10230 |
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