Interdependencies in Social and Economic Decision Making: A Conditional Logit Model of the Joint Homeownership-Mobility Decision

Abstract

Homeownership is one of the most important financial and social decisions consumers face. Typically, this decision is made jointly with decisions such as how much to save and whether to move. Although major consumption decisions most often are studied independently in consumer research, modeling interdependencies can contribute to interpretation of influences on their outcomes. The interdependency between decisions of homeownership and residential mobility is modeled in a conditional logit specification with household status level and cognitive factors as explanatory variables. Results indicate that these constructs have indirect effects on ownership through mobility that are unobserved if the decisions are considered independently.