ABSTRACT
INTRODUCTION This article presents a model that attempts to capture the factors
that are most important in determining an elderly homeowner's housing decision. The factors considered include the homeowner's home equity, financial assets, income, housing cost, and psycholog-
ASSUMPTIONS AND NOTATION We begin by considering an elderly household currently at time 0
amount of housing and its equity are not defined to be equal: They will vary across time due to appreciation of the home equity.
