Housing Consumption Disequilibrium and Local Residential Mobility

Abstract

An economic theory of local residential mobility is developed and empirically examined. The theory predicts that local mobility is most likely to occur among households whose actual housing consumption deviates the most from their utility-maximizing levels and whose monetary and psychic costs of moving are least. Two separate models are used in applying the theory to data obtained from a national household survey in the USA. The inclusion of variables designed to capture the needs of families to adjust their housing adds little explanatory power compared with more conventional predictors of mobility, although the housing-consumption variables generally have plausible effects on household mobility. Not all local moves are motivated primarily by housing considerations—nearly a third of all local moves are associated with new household formation, marriage, or divorce.