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Evolution and Determinants of Rent Burdens in Germany

Author

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  • Teresa Backhaus
  • Kathrin Gebers
  • Carsten Schröder

Abstract

The affordability of housing has become a major topic of discussion in Germany among both social scientists and the public at large. Using data from the German Socio-Economic Panel (SOEP), we provide rent-income ratios over more than two decades and show how they change with households’ disposable needs-adjusted income. We find a substantial increase in the ratios over the 1990s. In the decade that followed, they remained relatively constant. Moreover we find that rent-income ratios decrease in income at a decreasing rate, suggesting that rising square-meter prices put particular financial pressure on low-income households. Our analysis also indicates economies of scale from shared living space for multi-member households.

Suggested Citation

  • Teresa Backhaus & Kathrin Gebers & Carsten Schröder, 2015. "Evolution and Determinants of Rent Burdens in Germany," SOEPpapers on Multidisciplinary Panel Data Research 806, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp806
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    References listed on IDEAS

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    1. John M. Quigley & Steven Raphael, 2004. "Is Housing Unaffordable? Why Isn't It More Affordable?," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 191-214, Winter.
    2. Joachim R. Frick & Steffi Grimm, 2009. "Wohnen in Deutschland nach dem Mauerfall: eine Analyse für die Jahre 1990 bis 2008 auf Basis der Daten des Sozio-oekonomischen Panels (SOEP)," SOEPpapers on Multidisciplinary Panel Data Research 236, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Morris A. Davis & Francois Ortalo-Magne, 2011. "Household Expenditures, Wages, Rents," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(2), pages 248-261, April.
    4. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
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    Cited by:

    1. Christian Dustmann & Bernd Fitzenberger & Markus Zimmermann, 2022. "Housing Expenditure and Income Inequality," The Economic Journal, Royal Economic Society, vol. 132(645), pages 1709-1736.

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    More about this item

    Keywords

    home; amenities; and contributions of private households; income; taxes; and social security;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D3 - Microeconomics - - Distribution
    • D6 - Microeconomics - - Welfare Economics
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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