THE IMPACT OF RENT SHOCK ON HOUSEHOLD SAVING: EVIDENCE FROM A DIFFERENCE IN DIFFERENCES LOGIT MODEL

Abstract

This study investigates the impact of the rent crisis in Türkiye on household savings. Using data from the 2018, 2019, 2022, and 2023 rounds of Household Budget surveys, we employ a difference in differences method to compare the impact of rent price rises on the probability of saving of tenant households and homeowner households. Our findings show that the likelihood of saving declined for both tenants and homeowners after the 2022 rent shock. However, the decline was smaller for tenants. Specifically, the rent shock mitigated the decline in the probability of saving for tenants relative to homeowners by 3.4 percentage points. This suggests that some tenants, particularly those in high income group, may have increased precautionary savings or shifted toward real estate investment. On the other hand, the sharper decline in the probability of saving among homeowners may reflect rising housing related expenses, wealth effects, or increased discretionary spending.

Keywords

• Household Budget Surveys
• House Market
• Rent Crisis
• Saving
• Tenants
• Türkiye

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