Housing Affordability in Slovakia: what Factors Affect it?

Abstract

Housing affordability represents a challenge everyone faces when covering the costs of their current or potential housing on the one hand and costs unrelated to their housing within the limits of their own income on the other hand. At the international level, two approaches are used to measuring the housing affordability: the ratio approach and the residual approach. According to Eurostat’s definition, a household is considered “overburdened” when the total housing costs (“net” of housing allowances) represent more than 40% of disposable income. The primary objective of this paper was to define the relevant factors affecting the household cost burden in the Slovak Republic and quantifying the intensity of their influence. For this purpose, a logistic regression model and a classification tree model were created, using the sample of the cross-component of the data of the statistical survey EU SILC 2016. The analysis was completed by using SAS Enterprise Guide (SAS EG) and SAS Enterprise Miner (SAS EM).

Keywords

• housing affordability
• housing cost overburden rate
• eu silc
• logistic regression model
• decision tree model