Disentangling Age and Cohorts Effects on Home-Ownership and Housing Wealth in Turkey

Disentangling Age and Cohorts Effects on Home-Ownership and Housing Wealth in Turkey

Title:

Disentangling Age and Cohorts Effects on Home-Ownership and Housing Wealth in Turkey

Number:

17/06

Author(s):

Evren Ceritoğlu

Language:

English

Date:

March 2017

Abstract:

This paper analyses the role of age and cohort effects on home-ownership and housing wealth in Turkey. We utilize twelve consecutive waves of the Turkish Statistical Institute (TURKSTAT) Household Budget Surveys (HBS) from 2003 to 2014. We construct a pseudo-panel data set following Deaton (1985) using birth-year cohorts in which families are grouped into cohorts with respect to the birth year of their household heads. Empirical analysis shows that young cohorts are less likely to own their homes, but they are more likely to be in housing debt. Moreover, they are willing to invest in second homes as much as old cohorts. We estimate a Heckman two-step selection model to distinguish the contribution of quality growth on house prices, while the selection criterion is home-ownership. We regress weighted average of the natural logarithm of cohort home values on age and cohort dummy variables. We find that cohort effects on home values are significantly larger for young cohorts even after controlling for age effects and quality growth.

Keywords:

Home-ownership, Housing wealth, Cohort effects, Pseudo-panel

JEL Codes:

C23; D12; R21

Disentangling Age and Cohorts Effects on Home-Ownership and Housing Wealth in Turkey
CENTRAL BANK OF THE REPUBLIC OF TURKEY Head Office Anafartalar Mah. İstiklal Cad. No:10 06050 Ulus Altındağ Ankara Phone : (+90 312) 507 50 00 | Fax : (+90 312) 507 56 40