ISER Working Paper Series 2008-31
Staying together for the sake of the home? House price shocks and partnership dissolution in the UK
01 Sep 2008
This paper explores the importance of unanticipated house price shocks for marital dissolution in the UK using individual household data from the British Household Panel Survey (BHPS) and county-level house price data from the Halifax House Price Index (HHPI). Results suggest that positive and negative house price shocks have asymmetric effects on the probability of partnership dissolution. Negative house price shocks significantly increase the risk of partnership dissolution, while positive house price shocks do not have a significant effect in general. The destabilizing effect of negative house price shocks is particularly pronounced for couples with dependent children, low family income, and high mortgage debt. Results are robust to a wide variety of specifications.