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Homeownership and entrepreneurship

Bracke, Philippe and Hilber, Christian A. L. (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
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: 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
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: SERCDP0103
Date Deposited: 09 Jul 2012 13:20
URL: http://eprints.lse.ac.uk/44687/

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