Disentangling age and cohorts effects on home-ownership and housing wealth in Turkey

This paper analyses the contribution of age and cohort effects on home-ownership and housing wealth in Turkey. I construct a pseudo-panel data set based on birth-year cohorts by using sixteen waves of the Turkish Statistical Institute Household Budget Surveys from 2003 to 2018. The empirical analysis reveals that young cohorts are less likely to own their homes, but they are more likely to have outstanding housing debt. Moreover, they are as willing to invest in second homes as older cohorts. I estimate a Heckman two-step selection model to distinguish the contribution of the improvement in the quality of new buildings to home values. As a result, I find that cohort effects on home values are significantly larger for young households even after controlling for age effects and the improvement in the quality of new buildings. Thus, the empirical findings show that young cohorts have a stronger housing demand than old cohorts.