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Originally Posted by SFLRN  So which European countries have more generous welfare and a higher per capita GDP than the U.S.? |
GDP per capita isn't really an appropriate measure for this stuff, given the impact of wealth concentration. Moreover, it is countries with high poverty rates that tend to have high home ownership rates.
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So the correlation you assert does not apply to the U.S.?
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You wouldn't expect a perfect relationship, given the numerous variables impacting on the tenure decision. Given the poverty risks that your folk live under, we'd indeed expect a higher home ownership rate. However, the US's housing market is not a particular outlier. It has reasonably high home ownership and a stunted social welfare system.
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I'm only trying to point out a possible bias in the study, and that it may show something quite different from what you say it does.
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You're perhaps trying to over complicate matters? A large proportion of home owners are poverty-stricken and mortgage pressures are bound to intensity deprivation problems (and the higher risk of mental problems)
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What is? Increased externalities due to rentals?
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Externalities would impact on poor neighbourhoods, via home owners failing to maintain the quality of the housing stock. The rental market would be a different market failure: either asymmetric information problems (i.e. hidden action where the renter has a reduced incentive to look after the property) or opportunism (i.e. the owner stealing quasi-rents as, given there are costs from moving, they provide slum accommodation)