IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp15495.html
   My bibliography  Save this paper

Homeownership and the Perception of Material Security in Old Age

Author

Listed:
  • Garten, Claudius

    (TU Dortmund)

  • Myck, Michal

    (Centre for Economic Analysis, CenEA)

  • Oczkowska, Monika

    (Centre for Economic Analysis, CenEA)

Abstract

Homeownership has been shown to be related to various aspects of well-being, although both the causal nature of this relationship and the possible channels behind it have been difficult to identify. We focus on one of the most often quoted mechanisms which could be responsible for the positive effects of homeownership, namely its role in providing material security in old age. Using data from 15 European countries collected in wave 2 of the Survey of Health, Ageing and Retirement in Europe (SHARE), we analyse the relationship between homeownership and material security, as measured through subjective expectations of being better or worse off in the future. We find that homeowners have a higher level of material security than renters, and this association is especially strong for those living in big cities. For this subsample, in comparison to renters, owning a property in the top quartile of the home value distribution is associated with an increase in the probability of expecting to be better off in the future by as much as 43%. With respect to our measure of material security we find no such correlations with education, income or financial assets. We interpret the results as support for the argument that homeownership offers a very particular form of material security, which may be behind its positivse implications for well-being.

Suggested Citation

  • Garten, Claudius & Myck, Michal & Oczkowska, Monika, 2022. "Homeownership and the Perception of Material Security in Old Age," IZA Discussion Papers 15495, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15495
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp15495.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brueckner, Jan K, 1997. "Consumption and Investment Motives and the Portfolio Choices of Homeowners," The Journal of Real Estate Finance and Economics, Springer, vol. 15(2), pages 159-180, October.
    2. Arrondel, Luc & Lefebvre, Bruno, 2001. "Consumption and Investment Motives in Housing Wealth Accumulation: A French Study," Journal of Urban Economics, Elsevier, vol. 50(1), pages 112-137, July.
    3. Wändi Bruine de Bruin & Katherine G. Carman, 2012. "Measuring Risk Perceptions," Medical Decision Making, , vol. 32(2), pages 232-236, March.
    4. 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.
    5. Di, Zhu Xiao & Belsky, Eric & Liu, Xiaodong, 2007. "Do homeowners achieve more household wealth in the long run?," Journal of Housing Economics, Elsevier, vol. 16(3-4), pages 274-290, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Philippe Bracke & Christian Hilber & Olmo Silva, 2014. "Homeownership and Entrepreneurship: The Role of Mortgage Debt and Commitment," CESifo Working Paper Series 5048, CESifo.
    2. Tobias Schmidt & Julia Le Blanc, 2017. "Do homeowners save more? – Evidence from the Panel on Household Finances (PHF)," ERES eres2017_110, European Real Estate Society (ERES).
    3. Schmidt, Tobias & Alik-Lagrange, Arthur, 2016. "The Pattern of Home Ownership Across Age Cohorts and its Impact on the German Net Wealth Distribution," VfS Annual Conference 2016 (Augsburg): Demographic Change 145604, Verein für Socialpolitik / German Economic Association.
    4. Turner, Tracy M. & Luea, Heather, 2009. "Homeownership, wealth accumulation and income status," Journal of Housing Economics, Elsevier, vol. 18(2), pages 104-114, June.
    5. Yoshida, Jiro, 2017. "Stock Prices, Regional Housing Prices, and Aggregate Technology Shocks," HIT-REFINED Working Paper Series 72, Institute of Economic Research, Hitotsubashi University.
    6. Glenn Abela & William Gatt, 2021. "Saving behaviour in Malta: Insights from the Household Budgetary Survey," CBM Working Papers WP/02/2021, Central Bank of Malta.
    7. Ha, Sejeong & Hilber, Christian A.L. & Schöni, Olivier, 2021. "Do long-distance moves discourage homeownership? Evidence from England," Journal of Housing Economics, Elsevier, vol. 53(C).
    8. Leo Kaas & Georgi Kocharkov & Edgar Preugschat, 2019. "Does homeownership promote wealth accumulation?," Applied Economics Letters, Taylor & Francis Journals, vol. 26(14), pages 1186-1191, August.
    9. Wainer, Allison & Zabel, Jeffrey, 2020. "Homeownership and wealth accumulation for low-income households," Journal of Housing Economics, Elsevier, vol. 47(C).
    10. 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.
    11. Philippe Bracke & Christian Hilber & Olmo Silva, 2012. "Homeownerhip and Entrepreneurship," SERC Discussion Papers 0103, Centre for Economic Performance, LSE.
    12. Francesco Figari & Gerlinde Verbist & Francesca Zantomio, 2022. "Homeownership Investment and Tax Neutrality: a Joint Assessment of Income and Property Taxes in Europe," International Journal of Microsimulation, International Microsimulation Association, vol. 15(2), pages 62-76.
    13. Philippe Bracke & Christian Hilber & Olmo Silva, 2012. "Homeownerhip and Entrepreneurship," SERC Discussion Papers 0103, Centre for Economic Performance, LSE.
    14. Liao, Yu & Zhang, Junfu, 2021. "Hukou status, housing tenure choice and wealth accumulation in urban China," China Economic Review, Elsevier, vol. 68(C).
    15. Alexander Leodolter & Savina Princen & Aleksander Rutkowski, 2022. "Immovable Property Taxation for Sustainable and Inclusive Growth," European Economy - Discussion Papers 156, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    16. 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.
    17. Alik-Lagrange, Arthur & Schmidt, Tobias, 2015. "The pattern of home ownership across cohorts and its impact on the net wealth distribution: Empirical evidence from Germany and the US," Discussion Papers 11/2015, Deutsche Bundesbank.
    18. Jan Rouwendal, 2009. "Housing Wealth and Household Portfolios in an Ageing Society," De Economist, Springer, vol. 157(1), pages 1-48, March.
    19. Eli Beracha & Alexandre Skiba & Ken H Johnson, 2017. "Housing Ownership Decision Making in the Framework of Household Portfolio Choice," Journal of Real Estate Research, American Real Estate Society, vol. 39(2), pages 263-288.
    20. Núria Rodríguez‐Planas, 2018. "Mortgage finance and culture," Journal of Regional Science, Wiley Blackwell, vol. 58(4), pages 786-821, September.

    More about this item

    Keywords

    homeownership; well-being; material security; old age; expectations;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp15495. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.