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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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  • Isabelle CHORT
  • Bénédicte APOUEY

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

  • Isabelle CHORT & Bénédicte APOUEY, 2018. "Are rising house prices really good for your brain? House value and cognitive functioning among older Europeans," Working Papers 2017-2018_7, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Oct 2018.
  • Handle: RePEc:tac:wpaper:2017-2018_7
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    More about this item

    Keywords

    House prices; Wealth; Cognitive functioning; Health; Older Europeans; Europe; SHARE;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I1 - Health, Education, and Welfare - - Health
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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