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The perception of homeownership utility: Short-term and long-term effects

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  • Stotz, Olaf

Abstract

This paper investigates the effects of the ownership decision in the short-term and the long-term on subjective well-being. In the short-term, the subjective well-being score increases by about one point (on an eleven-point scale) on average, indicating the positive effects of ownership and confirming previous research. The long-term ownership effects, however, are considerably smaller, and owners perceive their subjective well-being to be about 0.7 points higher than before they bought their home. The results provide an explanation for this difference: individuals tend to adapt to their new housing situations after they have bought a home. The size of these ownership effects varies across different groups.

Suggested Citation

  • Stotz, Olaf, 2019. "The perception of homeownership utility: Short-term and long-term effects," Journal of Housing Economics, Elsevier, vol. 44(C), pages 99-111.
    • Handle: RePEc:eee:jhouse:v:44:y:2019:i:c:p:99-111
    DOI: 10.1016/j.jhe.2018.11.003
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    Cited by:

    1. Clark, Andrew E. & Díaz Serrano, Lluís, 2020. "The Long-run Effects of Housing on Well-Being," Working Papers 2072/376033, Universitat Rovira i Virgili, Department of Economics.
    2. Reto Odermatt & Alois Stutzer, 2022. "Does the Dream of Home Ownership Rest Upon Biased Beliefs? A Test Based on Predicted and Realized Life Satisfaction," Journal of Happiness Studies, Springer, vol. 23(8), pages 3731-3763, December.
    3. Sebastian Will & Timon Renz, 2021. "In Debt but Still Happy? Examining the Relationship between Homeownership and Life Satisfaction," ERES eres2021_89, European Real Estate Society (ERES).
    4. Andrew E. Clark & Luis Diaz-Serrano, 2023. "Do individuals adapt to all types of housing transitions?," Review of Economics of the Household, Springer, vol. 21(2), pages 645-672, June.
    5. Gum-Ryeong Park & Jinho Kim, 2023. "Trajectories of Life Satisfaction Before and After Homeownership: The Role of Housing Affordability Stress," Journal of Happiness Studies, Springer, vol. 24(1), pages 397-408, January.
    6. Richard H. Rijnks & Stephen Sheppard, 2018. "Occupant Well-Being and House Values," Department of Economics Working Papers 2018-05, Department of Economics, Williams College.

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    More about this item

    Keywords

    Adaptation; Homeownership; Subjective well-being;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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