The determinants of housing tenure choice: Evidence from micro data

Abstract

Ghana has three dominant modes of housing tenure: owner occupancy, renting and rent free. Rent free has been a substantial tenure mode in Ghana over the years. It was the major type of tenure in the country before 1998 when it became the next major type of tenure after owning (GSS, 2005). This study aims at estimating the determinants of the housing tenure decisions in Ghana. it employed the multinomial logit model to achieve this objective. It was found that a household's decision to rent is positively influenced by location in the forest and coastal ecological zones, urban location, a household head with basic education and the income of the household head. Location in the forest ecological zone, urban location, household heads with bachelor's degrees and employed household heads are the main positive determinants of the decision to stay rent free. Rent free, as a tenure choice is substantial and serves young graduates; the state should therefore make deliberate efforts to sustain and maintain the extended family system, since it is the major provider of rent free housing units in Ghana.