A Microeconomic Analysis of Homelessness: An Empirical Investigation Using Choice-Based Sampling

This study estimates a structural model of the probability of homelessness by drawing data from two sources. The observations on the housed come from the American Housing Survey and the data on the homeless come from a separate study dealing exclusively with the homeless. Since the survey on the homeless targeted a larger fraction of that population, the sample is choice-based. The results suggest that older males with low incomes and high levels of depression are more likely to be homeless. Improvement in the number and quality of homeless shelters is expected to increase substantially the number of homeless. The policy simulations provide support for cash transfers to the very poor to reduce their likelihood of becoming homeless and for a weakening of housing codes to increase the availability of inexpensive, low-quality rental housing.