LAUSR

Contrary to previous studies which examined newly-married households’ tenure choice decisions at a particular year, this study employs the cross-sectional household survey data in 2010 and 2017 and investigates whether the impacts of economic and housing cost variables on the probability of home owning are different over time and across regions. Endogeneity of net asset variable was taken into account and the user cost of owning variable was remeasured to better capture Korean housing finance and income tax structure. Estimation results showed that permanent income, relative housing cost and net asset were key determinants of housing tenure choice decisions of newly-married households, but the impacts of these variables were found to be different depending on time and region considered. While the marginal effect of permanent income on the probability of home owning was higher in 2017 than in 2010 across regions, net asset’s marginal effect has increased only in regions outside of the Seoul metropolitan region. On the other hand, compared to its marginal effect in 2010, relative housing cost of owning had a higher marginal effect in Seoul metropolitan region in 2017, but its marginal effect in 2017 considerably decreased in regions outside of Seoul metropolitan region. Based on these results, a couple of policy implications were drawn.