The relationship between income and housing deprivation in Luxembourg: a longitudinal analysis

The relationship between income and housing deprivation in Luxembourg is analysed at both a cross-sectional and longitudinal level using data from the Panel Socio-Economique 'Liewen zu Lëtzebuerg' (PSELL3) for 2003 to 2009. Long-term housing deprivation is negatively associated with long-term income but this relationship is not confirmed when controlling for unobserved heterogeneity through fixed effect models. This finding suggests that housing deprivation is less affected by short variations in income than by measures of permanent income and that unobserved characteristics of households, such as their wealth or assets, may affect the relationship between long-term income and long-term deprivation.