Housing Tenure Choice and Housing Expenditures in the Czech Republic

Choosing between rented housing and homeownership, the so called housing tenure choice, is a key decision made by each household. Therefore housing economists often seek an answer to the question which factors have an impact on this decision. The paper investigates potential tenure choice determinants using probit regression model based on the sample data. Results of the analysis, making use of the investigation of EU-SILC in the CR, showed that tenure choice is affected by the factors similar to those in other countries – household income, marital status of the household head and household size (persons per household). By contrast, the influence of other demographic characteristics, such as gender and age of head of the household has not been confirmed. The econometric model has also made it possible to evaluate potential impact of these factors on housing related expenses of households. In addition to the logical influence of household income, tenure choice decisions are significantly influenced by household size and residence in Prague, particularly in the rented housing sector.