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educe the quality of dwellings. Therefore, they are consistent with the theoretical predictions
of cases I and S.
Table 2 Probit coefficients and marginal effects (total effect)
Variable Coefficient Standard error Marginal effect
Intercept 1.41 ∗∗∗ 0.056
Tenant-owned housing −0.12 ∗∗∗ 0.036 −0.02
Landlord-owned housing −0.34 ∗∗∗ 0.034 −0.06
Built pre–1970 −1.33 ∗∗∗ 0.039
Built 1971–1980 −0.90 ∗∗∗ 0.039
Built 1981–1990 −0.46 ∗∗∗ 0.041
SRC 0.13 ∗∗∗ 0.046
Block −0.20 ∗ 0.118
Others 0.07 0.086
Room 0.04 ∗∗∗ 0.005
Story 0.16 ∗∗∗ 0.020
Income 0.05 ∗∗∗ 0.005
Number of observations 44772
Log-likelihood 4012.12
∗∗∗ indicates significance at 1%; ∗ indicates significance at 10%
Table 3 reports probit coefficients and marginal effects for tenure security on housing
quality. In line with the theoretical predictions of both cases I and S, tenure security has an
ambiguous effect on tenant-owned housing quality. For example, consider housing built before
1970. Housing moved into between 1991 and 1998 is more likely to be unsound than is housing
moved into before 1970 (with respective probabilities of 27% and 17%). The same is true of
housing built between 1971 and 1980. Consider landlord-owned housing. The more recent the
move-in date, the smaller the absolute value of the coefficient (except for housing moved into
between 1981 and 1990 constructed before 1970). This implies that the longer the tenancy
duration, the greater the extent of deterioration. Thus, tenure security further reduces the
quality of landlord-owned housing. This result confirms the theoretical predictions of both
cases I and S.
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