International Finance: Cross-Country Differences in Homeownership - A Cultural Phenomenon?

Cross-country differences in homeownership rates are large and very persistent over time, ranging between 44% in Switzerland to 83% in Spain. In this project we test the hypothesis that these cross-country differences are driven by cultural tastes. To isolate the effect of culture from the effects of institutions and economic factors, we investigate the homeownership attitudes of second generation immigrants in the United States. We find robust evidence that cross-country differences in cultural preferences are an important explanatory factor for the observed persistent differences in homeownership rates across countries.