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Home-ownership as a social norm and positional good: Subjective wellbeing evidence from panel data

Author

Listed:
  • Chris Foye

    (University of Reading, UK)

  • David Clapham

    (University of Reading, UK)

  • Tommaso Gabrieli

    (University College London, UK)

Abstract

Much attention has been devoted to examining the absolute benefits of home-ownership (e.g. security and autonomy). This paper, by contrast, is concerned with conceptualising and testing the relative benefits of home-ownership; those benefits that depend on an individual’s status in society. Home-ownership has previously been analysed as a social norm, implying that the relative benefits (costs) associated with being an owner (renter) are positively related to relevant others’ home-ownership values. The theoretical contribution of this paper is to additionally conceptualise home-ownership as a positional good, implying that the status of both home-owners and renters is negatively related to relevant others’ home-ownership consumption. The empirical contribution of this paper is to quantitatively test for these relative benefits in terms of subjective wellbeing. We run fixed effects regressions on three waves of the British Household Panel Study. We find that (1) a strengthening of relevant others’ home-ownership values is associated with increases (decreases) in the subjective wellbeing of home-owners (renters), and (2) an increase in relevant others’ home-ownership consumption decreases the life satisfaction of owners but has no effect for renters. Overall our findings suggest that (1) the relative benefits of home-ownership are both statistically significant and of a meaningful magnitude, and (2) home-ownership is likely to be both a social norm and a positional good. Without explicitly recognising these relative benefits, policymakers risk overestimating the contribution of home-ownership to societal wellbeing.

Suggested Citation

  • Chris Foye & David Clapham & Tommaso Gabrieli, 2018. "Home-ownership as a social norm and positional good: Subjective wellbeing evidence from panel data," Urban Studies, Urban Studies Journal Limited, vol. 55(6), pages 1290-1312, May.
    • Handle: RePEc:sae:urbstu:v:55:y:2018:i:6:p:1290-1312
    DOI: 10.1177/0042098017695478
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    3. 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.
    4. Bao, Helen X.H. & Robinson, Guy M., 2022. "Behavioural land use policy studies: Past, present, and future," Land Use Policy, Elsevier, vol. 115(C).
    5. Joanne Lindley & Steven McIntosh, 2019. "The Social Mobility of Home Ownership: To What Extent Have the Millennials Fared Worse?," Working Papers 2019012, The University of Sheffield, Department of Economics.
    6. Tetsuya Tsurumi & Rintaro Yamaguchi & Kazuki Kagohashi & Shunsuke Managi, 2020. "Attachment to Material Goods and Subjective Well-Being: Evidence from Life Satisfaction in Rural Areas in Vietnam," Sustainability, MDPI, vol. 12(23), pages 1-20, November.
    7. Fan, Ying & Sing, Tien Foo, 2021. "Macroeconomic policy-induced wealth effects on Chinese foreign housing investments," China Economic Review, Elsevier, vol. 69(C).
    8. Amy Clair, 2019. "Housing: an Under-Explored Influence on Children’s Well-Being and Becoming," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 12(2), pages 609-626, April.
    9. 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.
    10. Liping Liao & Wenjie Wu & Chenglei Zhang, 2022. "Housing prices and the subjective well-being of migrant workers: evidence from China," Journal of Happiness Studies, Springer, vol. 23(7), pages 3363-3388, October.
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    13. Qing Yang & Chaozheng Zhang, 2023. "How Does the Renewal of Urban Villages Affect the Resettled Villagers’ Subjective Well-Being? A Case Study in Wuhan, China," Land, MDPI, vol. 12(8), pages 1-22, August.

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