Housing consumption behavior of adult children homeowners: An empirical analysis

This dissertation investigates whether housing decisions of adult children homeowners are affected by their expectations about their elderly parents. This dissertation consists of three essays examining adult children housing decisions: (1) the decision to share, (2) having chosen to share, whether to move, and (3) having not yet chosen to share, whether to consume extra housing in anticipation of housing needs of their elderly parents. All essays use the Panel Study of Income Dynamics (PSID) data. The first essay focuses on adult children's decision to share housing with their parents. Contrary to the evidence in Kotlikoff and Morris (1990), the results indicate that improved incomes of adult children and their elderly parents, and the improved health of elderly parents would lead to a more independent living.;The second essay examines residential mobility decisions of adult children dependent sharers. The results show that dependent sharers' mobility decisions are influenced by capital market imperfection. In seems that wealth has no effect on the mobility decisions. Instead, there is evidence that liquidity constraints prevent some adult children from moving earlier to anticipate their sharing housing with their elderly parents.;The third essay predicts that adult children nonsharers with living parents may have precautionary demand for housing and this demand is affected by the expected parental welfare. The results confirm the presence of extra demand for housing and show that diminishing parental wealth, aging and retirement would encourage adult children to demand more extra housing. The effects of the expected parental welfare are more prevalent among adult children with financially vulnerable parents.