SFLRN

That could also because the countries with lower social welfare provisions also may tend to have higher per capita GDPs. (Not to mention they may have lower tax burdens allowing them to buy homes, since most U.S. taxes are levied on income, whereas the VAT would likely decrease the purchasing power of the poor to some degree). Another problem with that is that the U.S. has higher home ownership rates, and lower population density. In most cases owning a home in the U.S. is cheaper than in Europe (not to mention part of the "American Dream".)

Mental illness is a broad term. It can entail things like ADD, OCD, and many other things. It is not necessarily a severe illness (although it sometimes can be). If one is a wealthier then it tends to be that they can afford to provide their children with the treatment for their illness. Home-owners may also be more likely to notice such illness as they are more likely to have a spouse that spends their time at home (house-husband housewife). Also, does that control for income differences?

It would be difficult to maintain apartment quality if a larger percent of the poor occupied apartments (or other such living spaces). That would create more externalities as a degrading apartment hurts all tenants, and the neighbors. A degrading house hurts the one resident and some of the neighbors. (The possible exception could be a trail, which has the same incentive structure as a house).

Scucca

They don't

The US home ownership rate is not high. I've referred to general patterns (if anything, given the relatively restricted social welfare provided in the US, we'd expect a higher rate than what it achieves)

Treatment would be via the NHS. You're trying to over complicate matters. Britain has a reasonably high home ownership rate, encouraged by a stunted social housing market. This ensures a higher number of poor folk suffering the consequences of mortgage payments that impact severely on their general welfare.

And that is the norm in countries with high home ownership

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SFLRN

So which European countries have more generous welfare and a higher per capita GDP than the U.S.?
So the correlation you assert does not apply to the U.S.?
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. Without the actual study it's hard for us to say one way or the other.
What is? Increased externalities due to rentals?

mikhail

I think the principle reason people get into debt is their personality a bit like gambling addicts many are aware of the risks but go ahead anyway.If people are living month to month the temptation to buy things on credit is very strong and even under the knowledge of repayments people lie about their income to seccure loans they cant afford.

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Scucca

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.

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.

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)

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)

SFLRN

That's an interesting statement because the United Kingdom has a larger percent of it's population under the poverty line than in the U.S. (12% v. 14%). It also has a higher unemployment rate (as does most of Europe compared to the U.S.). It's per capita GDP is also about $10,000 lower than that of the U.S.. What measure would you prefer? Could you cite the actual study? I really do not know ehere you're getting this (cited information from the CIA worldfactbook).
I'm trying to point out why the evidence might not say what you think it does. I'd need to read it before we could know either way. Could I see some evidence on that?
There are then externalities on both sides, but what definitively shows it one way or the other?

Scucca

Why are you bothering to compare the UK and the US? They're virtually peas in the pod when it comes to poverty analysis (the only difference being the UK has higher pre-intervention poverty and has a slightly more effective welfare policy).

I'm doing something a tad more than that. I'm saying that if you compare welfare state systems, the more effective systems coincide with higher home ownership rates. Housing tenure becomes a means to self-insure.

Try the work by the Joseph Rowntree Foundation

As I said, I'd make a distinction between types of market failure. Externalities are consistent with home ownership. We have to refer to other problems to highlight the potential inefficiencies from the rental market

SFLRN

In what measurable way is the UK better at welfare policy? What other countries in Europe do you want to compare?
Do you mean to say the states with less well run systems tend to have higher home ownership so that the poor in those countries have some form of insurance?
"The survey estimated that:

"25 per cent of the adult population live in poverty;
2 per cent are rising from poverty;
12 per cent are potentially vulnerable to poverty; and
61 per cent do not live in poverty. "
Why are these numbers so incredibly different from the CIA worldfactbook?

Scucca

Compared to the US, it is more effective at reducing poverty

Take every Western country and compare their poverty rates and home ownership rates.

Yep, nasty typing error.

Check for poverty definition differences (the standard threshold is 60% of median equivalised income, with the OECD providing the equivalence scale)! You really shouldn't be using the CIA for this stuff. The Luxembourg Income Study is more suited for poverty comparisons

gunner

My investment in property like many of my friends has absolutely nothing to do with "old age poverty". Its nice thinking i work hard for the future of my children, hopefully giving them a good start in life with some, financial inheritance. I save- and pay into a pension for my old age. O and of course my pension from doing my bit in the Army

Paul.

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