Housing tenure choice in Scotland: an empirical study of the 1996 Scottish house condition survey

This thesis analyses Scottish households' tenure choice behaviour by using economic approaches. The data set comes from the 1996 Scottish House Condition Survey (SHCS). To estimate the household's tenure decision behaviour, two simulation models with different structures are developed. The first tenure choice model contains a simple one-level choice set. A multinomial logit model is employed to estimate three choice alternatives: owner-occupation, social renting and private renting. The second tenure choice model contains a two-level choice structure assuming that the household firstly decides to move or stay and then chooses a tenure alternative. A nested multinomial logit model is employed to estimate the decision to move/stay and the choice of three tenure alternative. The determinants of the two tenure choice models not only include household attributes but also include housing attributes. The household attributes generally consist of the household's demographic and socio-economic variables, while housing attributes include dwelling type, location and neighbourhood variables. In addition, this thesis also includes the housing subsidy and rationing variables to estimates their impacts on tenure choice. The estimation results show that the household long term income, the user cost of housing, housing subsidy and rationing variables, as expected, have the most significant influences on households' tenure decisions in Scotland. Moreover, three policy issues are derived from the results of the tenure choice models. The first issue discusses the simulation of the influences of changes in the income tax rate and the mortgage rationing ratios on tenure choice. The second issue analyses income inequality and tenure polarisation. The third issue examines the distribution of housing subsidy between tenures and income levels