In this paper, we use cross sectional data from the Spanish Survey of Household Budgets (ECPF base 1997) to develop a multinomial mixed logit model that seeks to explain the fundamental variables influencing the individual decisions on housing tenure in Spain during 1999. We consider four types depending on the holding regime (property or rent) and the building type (single family or multi family). With this aim, we first elaborate a measure of the permanent income imputed to individuals, as well as a hedonic price index for regions in Spain. After that, we proceed to estimate a mixed logit model for the housing tenure decision that will allow us to contemplate a certain non-observed heterogeneity in the behavior of the individuals, as well as to overcome the hypothesis of the independence of irrelevant alternatives and homoscedasticity, both characteristic of multinomial and nested logit models.

Key words: housing market, housing tenure choice, mixed logit.
JEL classification: C25, R21.