Estimated effects of increased income on homeowner repair expenditures

by Lawrence Helbers

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Reports the application of a model of homeowner repair expenditures, using baseline Housing Assistance Supply Experiment data for Brown County, Wisconsin, and St. Joseph County, Indiana. Estimates how much more elderly homeowners, divided into 15 categories, would spend on repairs if they received reverse annuity mortgage (RAM) payments amounting to $600, $1,200, or $2,400 annually. The income elasticity of demand for repair and improvement expenditures is estimated to fall between .83 and 1.16, with average repair expenditures typically increasing by less than 10 percent of the annual RAM payment.

This report is part of the RAND Corporation Note series. The note was a product of the RAND Corporation from 1979 to 1993 that reported other outputs of sponsored research for general distribution.

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