Models of trading behaviour and accumulation in stratified housing markets

In this paper the importance of a number of variables and assumptions in relation to subsidy and accumulation in the owner-occupied housing market is examined. First, a theoretical framework is established within which individual transitions relating to mobility and trading behaviour are expressed through market relations. Second, an English data set is used to examine the financial and demographic characteristics of owner occupiers and the nature of their trading behaviour. These households are then used in a number of numerical simulations over the period 1976 - 90 to relate economic outputs of subsidy and accumulation to assumptions about mover behaviour and the propensity to borrow for house purchase. Finally, some provisional empirical observations are made on the effects of inheritance over time and space.