Intergenerational effects of housing wealth: parental housing return and children’s home purchase

Speaker：Fang Shuai（PhD candidate, University of Groningen）

Host：Dai Yun, Associate Professor, Lingnan College

Time and Date：12:00-15:00, Feb.24, 2023

Venue: Wang Daohan Conference Room，Lingnan Hall

Language: English +Chinese

Abstract:

This paper examines whether household decisions are influenced by the experience shared by others in their social network, by investigating the effects of parental housing experience on their children's homeownership decision. We use nationwide administrative data from the Netherlands and find that a one percentage point increase in the parent's annualized cumulative return leads to a 0.1 percentage point increase in the probability of an initially renting child becoming a homeowner. We show that these results are robust across different specifications, and cannot be explained by differences in buyer characteristics, the timing of parents’ house purchase, and location. This intergenerational dependence could be explained by the effects of parental experience on expectation formation of children, while intergenerational wealth transfer is unlikely to play a role.

Profile of the speaker:

Fang Shuai is a PhD candidate in Economics at the University of Groningen. His research field is household finance. He received his master's and bachelor's degrees from Tsinghua University. His research focuses on family expectations, asset selection, intergenerational influences on investment returns, and entrepreneurial decision-making. His papers have been published in China Economic Review and his working papers are in the review stage of top international journals.