(1) NIB Capital Asset Management N.V., P.O.Box 8285, 3503 RG, Utrecht, The Netherlands (E-mail: erwin.charlier@nibcapital.com), NL;(2) Tilburg University, Dept. of Econometrics, P.O.Box 90153, 5000 LE, Tilburg, The Netherlands, NL
Abstract:
In this paper we model expenditure on housing for owners and renters by means of endogenous switching regression models using
cross-section data. We explain the share of housing in total expenditure from family characteristics and total expenditure,
where the latter is allowed to be endogenous. We apply various existing parametric and semiparametric techniques for cross-section
data. Exogeneity of total expenditure is rejected for the parametric models but not for most semiparametric models. The results
are compared on the basis of budget elasticities and graphs of the estimated relationship between the budget share spent on
housing and the logarithm of total expenditure.
First version received: November 1997 / Final version received: January 2000