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Wealth Effects or Economic Barometer: Why Do House Prices Matter for Psychological Health?

Listed author(s):
  • Anita Ratcliffe

    ()

    (Department of Economics, The University of Sheffield)

This paper investigates whether house prices are linked to mental health outcomes, and whether this association arises through wealth effects or whether third factors such as area amenities or economic conditions drive both house prices and psychological health. These alternative explanations have contrasting implications for the effect of house prices on the well-being of homeowners and non-homeowners, which are exploited in the empirical analysis. I document a positive association between house prices and the mental health of homeowners and non-homeowners, which is not consistent with wealth effects. Further analysis indicates that house prices matter via a role as an economic barometer.

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File URL: http://www.shef.ac.uk/economics/research/serps/articles/2012_014.html
File Function: First version, 2012
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Paper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2012014.

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Length: 27 pages
Date of creation: 2012
Handle: RePEc:shf:wpaper:2012014
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Web page: http://www.shef.ac.uk/economics
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  14. Robert Wassmer & Edward Lascher & Stephan Kroll, 2009. "Sub-national Fiscal Activity as a Determinant of Individual Happiness: Ideology Matters," Journal of Happiness Studies, Springer, vol. 10(5), pages 563-582, October.
  15. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, Oxford University Press, vol. 120(3), pages 963-1002.
  16. Gardner, Jonathan & Oswald, Andrew J., 2007. "Money and mental wellbeing: A longitudinal study of medium-sized lottery wins," Journal of Health Economics, Elsevier, vol. 26(1), pages 49-60, January.
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  18. Martin Farnham & Purvi Sevak, 2007. "Housing Wealth and Retirement Timing," Working Papers wp172, University of Michigan, Michigan Retirement Research Center.
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