2024 Reports

Underutilized Housing in an Aging Society: How Bequest Motives Affect Housing Choices

Seko, Miko; Sumita, Kazuto; Yoshida, Jiro

This study sheds light on the underutilization of housing stock among elderly households and examines the role played by bequest motives and inheritance taxes. Data from Japanese households reveal that underutilized rooms are prevalent, particularly in non-relocating elderly households who have recently renovated their homes. Our findings indicate that the motive to bequeath housing leads to the underutilization of housing through reduced mobility and increased renovations, even among working-age households. The underutilization of housing by elderly households leads to an inefficient allocation of resources in an aging society and exacerbates the problem of housing affordability.

Keywords: underutilized housing stock, tax distortions, mobility, renovation, aging society, IV probit model, Japan, 3SLS

JEL: J14, H21, R21