Dynamic modeling of housing tenure choice

In this study a dynamic random effects simultaneous equation model is devel oped to model household tenure choice decision. The novelty of the study li es in accounting for the dynamic aspects of housing tenure mode, namely, a move is prerequisite to a change in tenure mode and they are determined joi ntly, expected mobility and tenure choice are interdependent decisions, and tenure choice may be state dependent (i.e., taste for ownership acquired o r reinforced through the experience of being an owner). In addition, unobse rvable household heterogeneity is controlled by imposing a random effects s pecification. The estimation is based on panel data from the PSID using the method of maximum simulated likelihood. (C) 2000 Academic Press.