Residential Mobility Decisions in Japan:
Effects of Housing Equity Constraints and Income
Shocks under the Recourse Loan System
Miki Seko
&
Kazuto Sumita
&
Michio Naoi
Published online: 18 May 2011
#
Springer Science+Business Media, LLC 2011
Abstract This paper draws on six waves of Japanese household longitudinal data
(Keio Household Panel Survey, KHPS) and estimates a conditional fixed effects
logit model to investigate the effects of housing equity constraints and income
shocks on own-to-own residential moves in Japan. By looking at contemporaneous
extended Loan-to-Value (ELTV) and extended Debt-to-Income (EDTI) ratios under
the recourse loan system, we examine whether housing equity constraints and
negative income shocks have any impact on own-to-own residential moves. Taking
account of the specific nature of the recourse loan system in Japan, we further
investigate whether these effects are different between positive and negative equity
households. The estimation results show that housing equity constraints and negative
income shocks significantly deter own-to-own residential moves for positive equity
households.
J Real Estate Finan Econ (2012) 45:63–87
DOI 10.1007/s11146-011-9322-3
An earlier version of this paper (Seko, Sumita, and Naoi, 2009) was presented at the Asian Real Estate
Society-American Real Estate and Urban Economics Association Joint International Conference, the
University of California, Los Angeles, July 11–14, 2009, and received the Best Paper Award (the Maury
Seldin Advanced Studies Institute Award). It was also presented at the Asia Pacific Real Estate Research
Symposium at the University of Southern California, July 10–11, 2009 and at the 2009 Fall Annual
Meeting of the Japan Economic Association at Senshu University, October 10–11, 2009. We are grateful
for Danny Ben-Shahar, Peng Liu, Seow Eng Ong, Gary Painter, Chihiro Shimizu, Fukuju Yamazaki,
participants of the conferences and two anonymous referees for their helpful comments.
M. Seko (*)
Faculty of Economics, Keio University, 2-15-45 Mita, Minato-ku, Tokyo 108-8345, Japan
e-mail: seko@econ.keio.ac.jp
K. Sumita
Department of Economics, Kanazawa Seiryo University, Ushi 10-1, Gosho-machi,
Kanazawa-shi, Ishikawa 920-8620, Japan
e-mail: sumita@seiryo-u.ac.jp
M. Naoi
Faculty of Marine Technology, Tokyo University of Marine Science and Technology, 2-1-6
Etchujima, Koto-ku, Tokyo 135-8533, Japan
e-mail: naoi@kaiyodai.ac.jp
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