Book contents
- Frontmatter
- Contents
- List of Figures and Tables
- Preface
- 1 Crisis, What Crisis?
- 2 Is Housing Really Unaffordable?
- 3 What Factors Determine Changes in House Prices and Rents?
- 4 Influences on Household Formation and Tenure
- 5 Rental Affordability
- 6 What Determines the Number of New Homes Built?
- 7 Housing Demand, Financial Markets and Taxation
- 8 Housing, Affordability and the Macroeconomy
- 9 Planning and the Assessment of Housing Need and Demand
- 10 Raising the Level of Private Housing Construction
- 11 Subsidizing the Supply of Rental Housing
- 12 Subsidizing the Housing Costs of Lower-Income Tenants
- 13 Increasing Home Ownership
- 14 Where Do We Go from Here?
- Appendices
- Notes
- References
- Index
APPENDIX 2.1 - Modelling the Effects of Affordability on Stress
Published online by Cambridge University Press: 02 March 2021
- Frontmatter
- Contents
- List of Figures and Tables
- Preface
- 1 Crisis, What Crisis?
- 2 Is Housing Really Unaffordable?
- 3 What Factors Determine Changes in House Prices and Rents?
- 4 Influences on Household Formation and Tenure
- 5 Rental Affordability
- 6 What Determines the Number of New Homes Built?
- 7 Housing Demand, Financial Markets and Taxation
- 8 Housing, Affordability and the Macroeconomy
- 9 Planning and the Assessment of Housing Need and Demand
- 10 Raising the Level of Private Housing Construction
- 11 Subsidizing the Supply of Rental Housing
- 12 Subsidizing the Housing Costs of Lower-Income Tenants
- 13 Increasing Home Ownership
- 14 Where Do We Go from Here?
- Appendices
- Notes
- References
- Index
Summary
The effects of affordability on stress are modelled through a probit equation. The dependent variable refers to renters under the age of 60 and includes 5,715 observations, taken from the 2015/16 EHS. The dependent variable takes a value of one if the household is in stress (as defined in the main text) and zero otherwise. Twenty-nine per cent are defined to be in stress.
The key independent variable takes a value of one if the household is paying for housing more than 25 per cent of its household gross income, net of benefits, and zero otherwise. No allowance is made for property taxes, fuel or other costs. The variable is multiplied by a dummy for the income quintile in which the household lies, which allows different effects for affordability in each quintile. The lowest quintile is omitted as the comparator, but its implied coefficient is given by row (5) in Table A2.1; for the second quintile, the total effect is row (1) + row (5) and similarly for the other quintiles. Since the coefficients are taken from a probit equation, in this form they do not have a ready interpretation; for example, they are not marginal effects. Therefore, in the main text (Table 2.1), they are shown in terms of their relative sizes.
A range of demographic, tenure and location control variables, described in the text, are also added, but not shown in Table A2.1.
- Type
- Chapter
- Information
- Understanding AffordabilityThe Economics of Housing Markets, pp. 249 - 250Publisher: Bristol University PressPrint publication year: 2020