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DO LOW-INCOME HOUSEHOLDS BENEFIT FROM HOMEOWNERSHIP?
by
Abhishek Mamgain
A Dissertation Presented to the
FACULTY OF THE USC GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF PHILOSOPHY
(POLICY, PLANNING, AND DEVELOPMENT)
May 2011
copyright 2011 Abhishek Mamgain
Object Description
| Title | Do low-income households benefit from homeownership? |
| Author | Mamgain, Abhishek |
| Author email | mamgain@usc.edu; abhishekmamgain@gmail.com |
| Degree | Doctor of Philosophy |
| Document type | Dissertation |
| Degree program | Policy, Planning & Development |
| School | School of Policy, Planning, and Development |
| Date defended/completed | 2011-03-31 |
| Date submitted | 2011 |
| Restricted until | Unrestricted |
| Date published | 2011-04-22 |
| Advisor (committee chair) |
Raphael Bostic Gary Painter |
| Advisor (committee member) | Selale Tuzel |
| Abstract | This dissertation examines the costs and benefits of homeownership for low-income households and contributes to the literature through two empirical studies using the biennial Panel Study of Income Dynamics data for the period 1999 – 2007. The first study examines the influence of years of owner occupation and housing capital gains on household wealth and savings. The second study examines the influence of non-housing wealth on exits from homeownership.; The first study finds that low-income households derive limited wealth benefits from homeownership. The results indicate that, during the period 1999-2007, a median low-income household with a net wealth of $2,474 accumulated only $145 (2007 constant dollars) for each additional year of homeownership. However, these meager wealth benefits came at substantial risks to a large proportion of low-income homeowners, nearly 40% of whom suffered capital losses. The results also indicate that housing capital gains was only responsible for $34 in total annual total savings for a median non-mover low-income homeowner. Thus much of the annual savings of low-income homeowners were as a result of forced savings and could have been easily accomplished through a savings account. In addition, the results indicate that low-income homeowners experienced severe budget constraints and consumed much of the housing capital gains. Therefore, the study suggests that policies aimed at promoting wealth accumulation among low-income households would be more effective through non-housing instruments.; The second study finds that non-housing wealth has a significant inverse influence on exits due to involuntary reasons but no influence on voluntary exits. It also finds that low-income households are more likely to exit homeownership for both involuntary as well as voluntary reasons. The results indicate that a low-income homeowner with $18,100 in non-housing wealth will have 6% – 11% lower odds of involuntary exit in comparison to a median low-income homeowner with $ 4,830 in non-housing wealth. Poor health of the household head increases odds of exit for voluntary reasons by nearly 181% and unemployment by 79 %. In addition, a10% increase in the loan to value ration increase the odds of voluntary exits by 5.5%. Therefore, the study suggests several policy measures, such as savings reserve, higher downpayment requirement as well as unemployment and health insurance, so that low-income households can enjoy a more sustainable homeownership experience. |
| Keyword | Homeownership; costs and benefits of homeownership; low-income; medium-income; years of owner-occupation; wealth; total wealth; non-housing wealth; savings; total savings; non-housing savings; active savings; housing capital gains; exits from homeownership; involuntary reasons; voluntary reasons; homeownership experience; homeownership sustainability; PSID |
| Geographic subject (country) | USA |
| Coverage date | 1999/2007 |
| Language | English |
| Part of collection | University of Southern California dissertations and theses |
| Publisher (of the original version) | University of Southern California |
| Place of publication (of the original version) | Los Angeles, California |
| Publisher (of the digital version) | University of Southern California. Libraries |
| Provenance | Electronically uploaded by the author |
| Type | texts |
| Legacy record ID | usctheses-m3762 |
| Rights | Mamgain, Abhishek |
| Repository name | Libraries, University of Southern California |
| Repository address | Los Angeles, California |
| Repository email | http://www.usc.edu/isd/libraries/services/ask_a_librarian/email/ |
| Filename | etd-Mamgain-4368 |
| Archival file | uscthesesreloadpub_Volume40/etd-Mamgain-4368-0.pdf |
Description
| Title | Page 1 |
| Full text | DO LOW-INCOME HOUSEHOLDS BENEFIT FROM HOMEOWNERSHIP? by Abhishek Mamgain A Dissertation Presented to the FACULTY OF THE USC GRADUATE SCHOOL UNIVERSITY OF SOUTHERN CALIFORNIA In Partial Fulfillment of the Requirements for the Degree DOCTOR OF PHILOSOPHY (POLICY, PLANNING, AND DEVELOPMENT) May 2011 copyright 2011 Abhishek Mamgain |
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