360Digest

Here’s a bit of nonsense from Slate: “Why home ownership causes unemployement” by Tim Harford. The article, while entertaining, draws erroneous conclusions. We want to encourage homeownership and not try to make tenuous ties or correlations between homeownership and joblessness.

In a study by Denise DiPasquale of the University of Chicago and Edward L. Glaeser of Harvard University, they provide evidence that owning a home appears to build a sense of community and make people better citizens. Using survey data, the researchers found that homeowners are much more likely than renters to work to solve local problems, or know their local congressman by name.

Some folks are against mortgage tax breaks and government efforts to promote homeownership, however, there is proof that owning your own home provides indirect benefits or ”positive externalities”–benefits that extend to the welfare of society as a whole.

Using survey data and controlling for age, race, gender, income, marital status, having children, and other variables, the two economists find that homeowners are much more likely than renters to work to solve local problems. They’re also more likely to vote in local elections, attend church, garden, and join nonprofessional organizations.

Predictably, homeownership also affects the shape of local government spending. The researchers report that homeowners tend to favor lower overall budgets and welfare outlays but higher spending on schools and highways.

Interestingly, the positive effects of homeownership appear related to its negative impact on mobility. The longer people live in their own home, the more likely they are to engage in activities that improve their communities.

National Bureau of Economic Research, “Are Homeowners Better Citizens?”