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Neighborhood externality risk and the homeownership status of properties

Hilber, Christian A. L. (2005) Neighborhood externality risk and the homeownership status of properties. Journal of Urban Economics, 57 (2). pp. 213-241. ISSN 0094-1190

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Identification Number: 10.1016/j.jue.2004.10.006


In contrast to corporate and institutional investors, single owner-occupiers cannot adequately diversify housing investment risk. Consequently, homeownership should be relatively less likely in places with higher housing investment risk. Using the American Housing Survey, it is documented that neighborhood externality risk, a major component of housing investment risk, substantially reduces the probability that a housing unit is owner-occupied, even when controlling for housing type and numerous location and household specific characteristics. The effects are quantitatively meaningful and change-in-change estimates suggest that the effects are causal.

Item Type: Article
Official URL:
Additional Information: © 2005 Elsevier
Divisions: Spatial Economics Research Centre
Geography & Environment
Subjects: H Social Sciences > HT Communities. Classes. Races
G Geography. Anthropology. Recreation > G Geography (General)
JEL classification: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty
G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice; Investment Decisions
R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R21 - Housing Demand
R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R31 - Housing Supply and Markets
Date Deposited: 28 Jan 2008
Last Modified: 04 Jan 2024 05:42

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