The Determinants of Homeonwership in Presence of Shocks Experienced by Mexican Households
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Homeownership is both an individual and society objective, because of the positive neighborhood effects associated with areas of higher homeownership. To help realize these positive effects, the Mexican government has several programs directed to increasing homeownership. Many factors, however, may influence homeownership including shocks experienced by households. Shocks such as death in family, illness or accidents, unemployment, and business, crop, or livestock loss affect homeownership if households are unable to cushion the impact of the shock. Government income support programs, however, may help cushion the effect of a shock. The main objective is to determine how shocks that households’ experience and government income support programs influence homeownership in Mexico. A secondary objective is to determine how socio-demographic variables influence homeownership in Mexico. Based on the Random Utility Model, logit models of homeownership are estimated using data are from the 2002 Mexican National Survey on Living Levels of Households. Two models are estimated; with and without income. Income is excluded because of a large number of households that did not report income. Generally, inferences from the two models are similar. Homeownership appears to not be affected by shocks experienced by households. It appears households are able to cushion the impact of shocks. The two income support programs, the Program of Direct Rural Support of Mexico (PROGRESA) and the Program of Direct Rural Support of Mexico (PROCAMPO), appear to be increasing homeownership. These social welfare programs provide cash transfers to households. For whatever reason, PROGRESA has a larger effect on homeownership than PROCAMPO. Households with older heads have a larger probability of being a homeowner than households with younger heads. No statistically significance relationship exists between education and homeownership. Regional differences are seen in homeownership, with households located in the northwest region having a higher probability of homeownership than other regions. Differences in the significance of variable representing the household head’s gender, marital status, and occupation on homeownership exist between logit models that include and do not include current income. The most likely reason for these differences is interactions between the variables and a wealth effect.
Lopez Cabrera, Jesus Antonio 1977- (2012). The Determinants of Homeonwership in Presence of Shocks Experienced by Mexican Households. Master's thesis, Texas A&M University. Available electronically from