Home-ownership and entrepreneurship

It's sometimes argued that housing wealth provides a source of equity for entrepreneurs that helps explain why business start-ups may be higher in areas with high house prices. But these arguments ignore the fact that home ownership (especially if it comes with lots of leverage via a high loan to value mortgage) is risky and that homeowners might therefore avoid other risky activities (like entrepreneurship). An interesting new paper by SERC colleagues Philippe Bracke, Christian Hilber and Olmo Silva suggests that this is indeed the case - purchasing a home reduces the likelihood of starting entrepreneurial activity by 20-25%.