The Housing Decisions of Older Households: A Dynamic Analysis

Abstract The housing decisions of older households are best modeled as dynamic rather than static decisions. A dynamic discrete choice econometric technique is applied to data on households whose heads are aged 50 years or older to estimate older households' preferences for living in homes with large and small amounts of equity, rental units, and dependent arrangements. The dynamic technique provides a better fit than a static analysis, and the results suggest that economic factors such as income and financial assets are more important to the decision than previous conventional analyses have suggested.

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