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

Author

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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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    File URL: http://gtl.univ-pau.fr/travaux/2339F_2017_2018_7docWCATT_House_Prices_Cognitive_Health_Europe_BApouey_IChort_revuOct18.pdf
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    References listed on IDEAS

    as
    1. Benedicte Apouey & Andrew E. Clark, 2015. "Winning Big but Feeling no Better? The Effect of Lottery Prizes on Physical and Mental Health," Health Economics, John Wiley & Sons, Ltd., vol. 24(5), pages 516-538, May.
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    3. Mazzonna, Fabrizio & Peracchi, Franco, 2012. "Ageing, cognitive abilities and retirement," European Economic Review, Elsevier, vol. 56(4), pages 691-710.
    4. Yilmazer, Tansel & Babiarz, Patryk & Liu, Fen, 2015. "The impact of diminished housing wealth on health in the United States: Evidence from the Great Recession," Social Science & Medicine, Elsevier, vol. 130(C), pages 234-241.
    5. Viola Angelini & Anne Laferrère, 2012. "Residential Mobility of the European Elderly," CESifo Economic Studies, CESifo, vol. 58(3), pages 544-569, September.
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    7. repec:eee:socmed:v:192:y:2017:i:c:p:36-48 is not listed on IDEAS
    8. John Gathergood, 2012. "Debt and Depression: Causal Links and Social Norm Effects," Economic Journal, Royal Economic Society, vol. 122(563), pages 1094-1114, September.
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    More about this item

    Keywords

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

    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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