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What are the Social Benefits of Homeownership? Experimental Evidence for Low-Income Households
Journal of Urban Economics (2010)
  • Gary V Engelhardt, Syracuse University
  • Michael D Eriksen, University of Georgia
  • William G Gale, Brookings Institution
  • Gregory B Mills, Harvard University

We estimate the social benefits of homeownership using an exogenous instrument based on randomly assigned treatment status from a field experiment that subsidized saving for home purchase for lowincome renters through Individual Development Accounts (IDAs). This approach attempts to eliminate the potential correlation present in previous analyses between unobserved individual characteristics leading to homeownership and traits leading to provision of social capital or local amenities. Consistent with previous work, we show that homeownership positively affects political engagement in simple probits. Instrumental variable probits, however, show no impact of homeownership on political involvement. IV results for other social outcomes are less conclusive. The analysis suggests that with the use of an exogenous instrument, it is possible to generate results that are different from the previous literature. Our results also suggest that being eligible to open an IDA did not spur households to provide more social capital or local amenities.

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Citation Information
Gary V Engelhardt, Michael D Eriksen, William G Gale and Gregory B Mills. "What are the Social Benefits of Homeownership? Experimental Evidence for Low-Income Households" Journal of Urban Economics Vol. 67 Iss. 3 (2010)
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