Kathrin Schlafmann

Project title

Households and the Housing Market

What is your project about?

In the past 2 years, house prices in Denmark have increased by 18 percent while Danish households have the highest debt-to-income ratio among all OECD countries. This has policy makers worried about the stability of the housing market. Yet, there is no consensus about the appropriate policy response. This is because of a fundamental problem of the housing market: The academic literature is lagging behind policy makers. This project will combine empirical analyses of the effects of past developments in the housing market with theoretical modelling. This will allow us to evaluate which forces drive house prices and how regulation of housing and mortgage markets will affect house prices, the indebtedness of households, and the stability of the economy.

How did you become interested in your particular field of research?

I became interested in the field of Household Finance, and housing in particular, because it is a field that is directly relevant for everyone. For most people, buying a house is the single most important purchase that they make during their lifetime. And since it is so expensive, most people need to finance it by taking on a large amount of debt. This again has lasting impact on their lifetime finances. In addition, we saw during the Great Financial Crisis of 2008 that the developments in the housing and mortgage markets are crucial for the stability of the economy as a whole. This combination of importance both for the individual household and for the global economy fascinates me.

What are the scientific challenges and perspectives in your project?

In this project, we will combine two largely separate strands of the literature: (1) empirical analyses of house prices and policy changes using Danish register data, and (2) construction of theoretical models that can explain the causes for the empirical patterns. Both of these methods have their strengths and their challenges, which limits how informative each can be in guiding policy makers. By combining the two as of now separate lines of research, we will be able to overcome these limitations.

What is your estimate of the impact, which your project may have to society in the long term?

I expect the results of the project to be of direct relevance to policy makers when they decide about whether and how to influence developments in the housing market. Since housing is very important both for each individual homeowner and for the stability of the economy as a whole, it is crucial that policy makers can rely on well-founded academic research when they make these decisions. This projects aims to push the frontier of research in housing markets and help policy makers make informed decisions.

Which impact do you expect the Sapere Aude programme will have on your career as a researcher?

The Sapere Aude grant will allow me to build a research group around me, where we bring together an international group of researchers with world-leading experts in the field. Moreover, the grant will allow me to train PhD students into this international environment. Sapere Aude will thus be a stepping stone in my ambition to build up an international hub for housing market research that combines research of previously separate strands of the literature.

Background and personal life

I was born in Germany and have studied and worked both in Germany and in the United States, the United Kingdom, and Sweden before moving to Denmark in 2017. I live in Copenhagen with my husband and 2-year old son. In my free time, I like to go jogging and swimming and I enjoy relaxing with a good book.