Man Without Qualities

Thursday, May 02, 2002

Why Own Your Home?

Many governments encourage home ownership. But even with government financial incentives, home ownership is highly questionable as a financial investment.

For families with children, there may be another kind of non-financial return to the home ownership investment. It seems that there is support for the belief that "children living in owned homes math achievement is up to seven percent higher and reading achievement is up to six percent higher, [all else being equal]. ... [T]he measure of a child's behavior problems is up to four percent lower if the child resides in an owned home. Existing literature suggests that these youths' greater cognitive abilities and fewer behavioral problems will result in higher educational attainment, greater future earnings, and a reduced tendency to engage in deviant behaviors." These results purport to adjust for many factors that influence the decision to own a home. That is, concerns such as "rich people tend to own rather than rent" are supposedly already taken into account by the study.

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