Leverage and Elderly Homeowners’ Decisions to Downsize

Bibliographic Data

ID11485183
AuthorsXun Bian (0000-0002-4372-9382, Longwood University, corresponding author)
Year2016
Volume31
Issue1
Pages20-41
Publication date2016-01-02
Open AccessNo
TypeARTICLE
VenueHousing Studies (JOURNAL)
Journal identifiersISSN: 0267-3037 • E-ISSN: 1466-1810
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/02673037.2015.1024203
OpenAlexW1967239648
LanguageEN
Citations received11
References cited19

We study the effect of financial leverage, measured using the loan-to-value (LTV) ratios, on elderly homeowners’ decisions to downsize. Using a 1999–2011 sample of elderly homeowners from the Panel Study of Income Dynamics, we find that a higher LTV ratio increases the propensity to downsize. Elderly homeowners with higher LTV ratios are more likely to move into properties with fewer rooms, to move from single-family properties into multifamily properties, and to move into less expensive homes. Our point estimates suggest that on average, a 10 per cent increase in the LTV ratio is associated with a 7.7–9.7 per cent increase in the probability to downsize

Actuarial science · Business · Demographic economics · Econometrics · Economics · Leverage (statistics · Loan-to-value ratio · Panel Study of Income Dynamics · Point (geometry · Statistics · Financial Literacy, Pension, Retirement Analysis · Housing Market and Economics · Housing, Finance, and Neoliberalism · Mathematics

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