This paper examines the simultaneous individual choices in Spain as regards housing (tenure choice and demand) and urban location decisions, taking into account certain unobserved heterogeneity exhibited by individuals. A multinomial mixed logit model is proposed to portray household decisions considering four different options: homeownership according to the type of urbanisation of the neighbourhood (high-level urban property, medium/inferior-level urban property and rural property) and renting. Finally, housing demand is estimated, controlling for sample selection. The results confirm that both housing tenure and urban location, in addition to the unobserved heterogeneity of individuals in this context, could modify appreciably housing demand estimates for both owners and renters.
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