Reference-dependent housing choice behaviour: Why are elderly reluctant to move?
This paper provides novel insights into whether reference-dependence affects the preference for moving of elderly households. We propose an extended framework to measure reference dependence that allows the identification of symmetric as well as asymmetric valuation of losses and gains by an individual. The framework is applied in a discrete choice model based on a stated preference experiment with 440 elderly Dutch home owners. We find clearly that the current living situation (reference) affects the housing choice behaviour; the effect differs however by housing attribute. Among other things, we find a general aversion to changing location. The framework we present is generic and can be readily applied in other stated choice experiments. The reference-based model increases the goodness-of-fit substantially in the case considered and the results have clear implications for ageing-in-place policies which are currently being developed in many countries.