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Title: Another Look at Wealth and Marital Relationships: The Effects of House Prices on Divorce Rates

Citation Type: Dissertation/Thesis

Publication Year: 2009

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Abstract: The divorce rate in the United States has increased dramatically since the 1960s. Much research has attempted to explain this epidemic. This paper analyzed the effects of house price changes on divorce rates. The study is based on Gary Beckers theory (1977) that a drastic change in wealth increases the probability of marital dissolution. Data from the Current Population Survey and from the Office of Federal Housing Enterprise Oversight were used. Based on the MSA level, a fixed effects model was used to estimate the effects over a period of one year, three year, and five year changes in the house price index. The results supported Beckers theory, in which positive and negative changes in house prices significantly affected the divorce rate for homeowners. As house values increased, we observed increased rates of separation. Moreover, if house prices decreased, divorce rates decreased. It is predicted that as house prices decrease, married couples are more financially dependent of each other, and they cannot afford to separate because it is more difficult for them to access equity from their house.

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Authors: Mused, Abobaker

Institution: Hunter College

Department: Economics

Advisor: Purvi Sevak

Degree: Master of Arts

Publisher Location: New York, NY

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Data Collections: IPUMS CPS

Topics: Family and Marriage

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