This paper exploits the significant recent variation in United States house prices to empirically examine the effect on housing equity constraints and nominal loss aversion on household mobility. The analysis uses unique, detailed data from 1985-1996 on household characteristics, mobility, and wealth from the National Longitudinal Survey of Youth (NLSY79) matched with house price data from 149 metropolitan areas to estimate semiparametric proportional hazard models of intra- and inter-metropolitan mobility. There are five principal findings: (1) household intra-metropolitan own-to-own mobility responds differently to nominal housing losses than to gains; (2) nominal loss aversion is significantly less pronounced in intra-metropolitan own-to-rent and inter-metropolitan mobility, respectively; (3) there is some evidence of binding equity constraints in intra-metropolitan own-to-own mobility; (4) there is little evidence that low equity constrains intra-metropolitan own-to-rent and inter-metropolitan mobility, respectively; (5) a comparison of the estimated effects indicates that nominal loss aversion has a more dominant effect than equity constraints in restricting household mobility, roughly two and one-half to three times the impact of equity constraints.

Document Type

Working Paper




nominal loss aversion, household mobility, housing equity, National Longitudinal Survey of Youth, NLSY79, housing supply, housing markets




Working Papers Series



Additional Information

Harvest from RePEc at


Metadata from RePEc

Included in

Economics Commons



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.