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Disentangling the housing satisfaction puzzle: Does homeownership really matter?

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  • Diaz-Serrano, Luis

Abstract

There is a general consensus that homeownership has beneficial effects for both individuals and society in many outcomes. However, research regarding the effect of homeownership on individuals' subjective well-being remains inconclusive. In this paper, for the first time, we provide empirical evidence for the link between homeownership and housing satisfaction using panel data. We use the eight waves of the European Community Household Panel (ECHP) covering the period 1994-2001. We observe that renters who become homeowners not only experience a significant increase in housing satisfaction, but also after changing their tenure status, they obtain a different utility from the same housing context. This evidence might provide support to the hypothesis that a share of the differences in the perceived utility derived from housing can be attributed to (un)fulfilled expectations or aspirations regarding homeownership.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 30 (2009)
Issue (Month): 5 (October)
Pages: 745-755

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Handle: RePEc:eee:joepsy:v:30:y:2009:i:5:p:745-755

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Web page: http://www.elsevier.com/locate/joep

Related research

Keywords: Housing satisfaction Subjective well-being Homeownership Fixed-effects Housing aspirations;

References

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  1. van Praag, B. M. S. & Frijters, P. & Ferrer-i-Carbonell, A., 2003. "The anatomy of subjective well-being," Journal of Economic Behavior & Organization, Elsevier, vol. 51(1), pages 29-49, May.
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  8. Easterlin, Richard A., 2006. "Life cycle happiness and its sources: Intersections of psychology, economics, and demography," Journal of Economic Psychology, Elsevier, vol. 27(4), pages 463-482, August.
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  12. Dietz, Robert D. & Haurin, Donald R., 2003. "The social and private micro-level consequences of homeownership," Journal of Urban Economics, Elsevier, vol. 54(3), pages 401-450, November.
  13. Bernard M.S. van Praag & Paul Frijters, 1999. "The measurement of welfare and well-being; the Leyden approach," School of Economics and Finance Discussion Papers and Working Papers Series 071a, School of Economics and Finance, Queensland University of Technology.
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Citations

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Cited by:
  1. Almudena Sevilla-Sanz & Jose Ignacio Gimenez-Nadal, 2010. "The Time-crunch Paradox," Economics Series Working Papers 483, University of Oxford, Department of Economics.
  2. Feng Hu, 2013. "Homeownership and Subjective Wellbeing in Urban China: Does Owning a House Make You Happier?," Social Indicators Research, Springer, vol. 110(3), pages 951-971, February.
  3. Diaz-Serrano, Luis & Rodríguez-Pose, Andrés, 2011. "Decentralization, Happiness and the Perception of Institutions," IZA Discussion Papers 5647, Institute for the Study of Labor (IZA).
  4. Bloze, Gintautas & Skak, Morten, 2011. "Homeownership and ill-being," Discussion Papers of Business and Economics 5/2011, Department of Business and Economics, University of Southern Denmark.

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