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Are rising house prices really good for your brain? House value and cognitive functioning among older Europeans

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  • Bénédicte Apouey

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Isabelle Chort

    (UPPA - Université de Pau et des Pays de l'Adour)

Abstract

This study examines how house prices in uence cognitive functioning for individuals aged 50+ in Europe. Using data from the Survey of Health, Ageing and Retirement, we compute the median house price for each region-year, employing individual self-reported house values. We allow housing market fluctuations to have different effects during episodes of price increases and decreases, and we study owners with a mortgage, owners without a mortgage, and tenants separately. House price booms do not systematically improve cognitive outcomes: for outright owners, rising prices have a negative impact on cognitive health. For richer households, this negative effect is driven by respondents with no second home, suggesting that high prices make second home ownership less affordable and reduces household residential mobility. Finally, house price decreases are associated with better cognitive health for mortgaged owners, but this beneficial effect is largely due to the burst of the house price bubble in Spain.

Suggested Citation

  • Bénédicte Apouey & Isabelle Chort, 2018. "Are rising house prices really good for your brain? House value and cognitive functioning among older Europeans," Working Papers hal-02141060, HAL.
    • Handle: RePEc:hal:wpaper:hal-02141060
    Note: View the original document on HAL open archive server: https://univ-pau.hal.science/hal-02141060
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    References listed on IDEAS

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    Keywords

    House prices; Wealth; Cognitive functioning; Health; Older Europeans; Europe; SHARE;
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