This paper develops a life-cycle portfolio allocation model to address the effects of housing investment on the … portfolio allocation of households. The model employs a comprehensive housing investment structure, Epstein-Zin recursive … risk aversion and elasticity of intertemporal substitution. The model shows that housing investment has a strong crowding …

investors who acquire housing services by either renting or owning a home. The joint existence of these two investment vehicles …

of the degree of households’ financial literacy on their portfolio imbalance towards housing investment. We find that …

.g., housing) causes a more conservative portfolio allocation using a novel instrumental variables strategy related to age at … marriage. We find that a $1 increase in housing causes a 50-70 cent reallocation from stocks to bonds for the average investor … greater exposure to housing price risk. …

I study optimal housing and portfolio choice under stochastic inflation and real interest rates. Renters allocate … optimal housing, stock, bond, and mortgage choice. Young homeowners take an adjustable-rate mortgage (ARM) and invest …

exposure to house price risk and tend to rent their home. Later in life the desired housing investment increases and will … housing units (for renting out) or house price-linked financial assets. In the final years, preferences shift back to home … rental. The derived strategies are still useful if housing positions are only reset infrequently. Our results suggest that …

illiquid wealth. In the case of household portfolios, the most important illiquid asset is housing: if housing stock … periods of no adjustment that are affected by housing price risk (through a hedge term). When the housing stock is not … adjusted, we argue that tests for portfolio efficiency of financial assets must then be run conditionally upon housing wealth …

Chetty and Szeidl (2012) propose to estimate the effect of housing on portfolio choice by distinguishing between the …