Homeownership and entrepreneurship

Bracke, Philippe and Hilber, Christian A. L. ORCID: 0000-0002-1352-495X (2012) Homeownership and entrepreneurship. SERC discussion paper (SERCDP0103). Spacial Economics Research Centre, London School of Economics and Political Science, London, UK.

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Abstract

We study the link between homeownership and entrepreneurship by exploiting the longitudinal dimension of the British Household Panel Survey (BHPS) and constructing a detailed monthly-spell dataset that tracks individuals‟ job history and tenure choice, coupled with other time-varying characteristics. Our fixed-effects estimates show that purchasing ahouse reduces the likelihood of starting a business by 20-25%. This result is driven by homeowners with mortgages and persists for several years after entering homeownership. The negative link can be rationalized by portfolio considerations: leveraged housing investments crowd out entrepreneurial investments. Alternative explanations based on credit constraints find little support in our data.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://www.spatialeconomics.ac.uk/
Additional Information:	© 2012 The Authors
Divisions:	Geography & Environment Spatial Economics Research Centre Centre for Economic Performance
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor
JEL classification:	D - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Personal Finance G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice; Investment Decisions L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R21 - Housing Demand
Date Deposited:	09 Jul 2012 13:20
Last Modified:	13 Sep 2024 20:21
URI:	http://eprints.lse.ac.uk/id/eprint/44687

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