New evidence of the effect of transaction costs on residential mobility

J.N. van Ommeren, M. van Leuvensteijn

Research output: Contribution to JournalArticleAcademicpeer-review


Transaction costs have attracted considerable attention in the theoretical literature on residential mobility. Transaction costs are thought to cause suboptimal consumption of housing but may also negatively affect labor market outcomes. In the current paper, we demonstrate empirically for the Netherlands that transaction costs have a strong negative effect on the owners' probability of moving. Under a range of different specifications, it appears that a 1 percent-point increase in the value of transaction costs - as a percentage of the value of the residence - decreases residential mobility rates by (at least) 8 percent. The estimates imply that ownership to ownership mobility rates would be substantially higher in the absence of the current 6 percent ad valorem buyer transaction tax. Our estimates are consistent with the observation that in the Netherlands ad valorem transaction costs mainly consist of buyer transaction costs. © Blackwell Publishers, 2005.
Original languageEnglish
Pages (from-to)681-702
Number of pages21
JournalJournal of Regional Science
Publication statusPublished - 2005


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