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Disentangling the Housing Satisfaction Puzzle: Does Homeownership Really Matter?

Author

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  • Díaz Serrano, Luis
  • Ferrer Carbonell, Ada
  • Hartog, Joop

Abstract

There is a general consensus that homeownership has beneficial effects for both individuals and society in many outcomes. However, research regarding the effect of homeownership on individuals' subjective well-being remains inconclusive. In this paper, for the first time, we provide empirical evidence for the link between homeownership and housing satisfaction using panel data. We use the eight waves of the European Community Household Panel (ECHP) covering the period 1994-2001. We observe that renters who become homeowners not only experience a significant increase in housing satisfaction, but also after changing their tenure status, they obtain a different utility from the same housing context. This evidence might provide support to the hypothesis that a share of the differences in the perceived utility derived from housing can be attributed to (un)fulfilled expectations or aspirations regarding homeownership. Keywords: Housing satisfaction, subjective well-being, homeownership, fixed-effects, housing aspirations JEL classification: D1, R2.

Suggested Citation

  • Díaz Serrano, Luis & Ferrer Carbonell, Ada & Hartog, Joop, 2009. "Disentangling the Housing Satisfaction Puzzle: Does Homeownership Really Matter?," Working Papers 2072/42898, Universitat Rovira i Virgili, Department of Economics.
  • Handle: RePEc:urv:wpaper:2072/42898
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    References listed on IDEAS

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    1. 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.
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    5. van Praag, B. M. S. & Frijters, P. & Ferrer-i-Carbonell, A., 2003. "The anatomy of subjective well-being," Journal of Economic Behavior & Organization, Elsevier, vol. 51(1), pages 29-49, May.
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    8. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    9. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    10. Guillaume R. Frechette, 2001. "Update to random-effects ordered probit," Stata Technical Bulletin, StataCorp LP, vol. 10(61).
    11. Luis Diaz-Serrano & Alexandrina P. Stoyanova, 2008. "The Causal Relationship between Individual’s Choice Behavior and Self-Reported Satisfaction: the Case of Residential Mobility in the EU," Working Papers XREAP2008-02, Xarxa de Referència en Economia Aplicada (XREAP), revised Mar 2008.
    12. Gary Chamberlain, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 225-238.
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    Citations

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    Cited by:

    1. Diaz-Serrano, Luis & Rodriguez-Pose, Andres, 2011. "Decentralization, Happiness, and the Perception of Institutions," CEPR Discussion Papers 8356, C.E.P.R. Discussion Papers.
    2. Luis Diaz‐Serrano & Andrés Rodríguez‐Pose, 2012. "Decentralization, Subjective Well‐Being, and the Perception of Institutions," Kyklos, Wiley Blackwell, vol. 65(2), pages 179-193, May.
    3. Tim Tiefenbach & Florian Kohlbacher, 2015. "Happiness in Japan in Times of Upheaval: Empirical Evidence from the National Survey on Lifestyle Preferences," Journal of Happiness Studies, Springer, vol. 16(2), pages 333-366, April.
    4. Bloze, Gintautas & Skak, Morten, 2011. "Homeownership and ill-being," Discussion Papers of Business and Economics 5/2011, University of Southern Denmark, Department of Business and Economics.
    5. Nabanita Datta Gupta & Nancy L. Etcoff & Mads M. Jaeger, 2016. "Beauty in Mind: The Effects of Physical Attractiveness on Psychological Well-Being and Distress," Journal of Happiness Studies, Springer, vol. 17(3), pages 1313-1325, June.
    6. Jose Gimenez-Nadal & Almudena Sevilla-Sanz, 2011. "The Time-Crunch Paradox," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 102(2), pages 181-196, June.
    7. Albiol, Judit & Díaz Serrano, Lluís & Teruel, Mercedes, 2014. "Is Self-employment a Way to Escape from Skill Mismatches?," Working Papers 2072/247652, Universitat Rovira i Virgili, Department of Economics.
    8. Cheng, Zhiming & King, Stephen P. & Smyth, Russell & Wang, Haining, 2016. "Housing property rights and subjective wellbeing in urban China," European Journal of Political Economy, Elsevier, vol. 45(S), pages 160-174.
    9. Michal Rubaszek & Margarita Rubio, 2017. "Does rental housing market stabilize the economy? A micro and macro perspective," Discussion Papers 2017/06, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    10. Albiol Sanchez, Judit & Diaz-Serrano, Luis & Teruel, Graciela, 2015. "Is Self-employment a Way to Escape from Skill Mismatches?," IZA Discussion Papers 9008, Institute for the Study of Labor (IZA).
    11. Adrian Chadi & Clemens Hetschko, 2015. "How Job Changes Affect People's Lives: Evidence from Subjective Well-Being Data," SOEPpapers on Multidisciplinary Panel Data Research 747, DIW Berlin, The German Socio-Economic Panel (SOEP).
    12. repec:nbp:nbpbik:v:48:y:2017:i:2:p:197-234 is not listed on IDEAS
    13. Sara Ramos & Elias Soukiazis, 2014. "Determinants of Subjective Well-Being in Portugal: A Micro-Data Study," GEMF Working Papers 2014-16, GEMF, Faculty of Economics, University of Coimbra.
    14. Wojtek Tomaszewski & Francisco Perales, 2014. "Who Settles for Less? Subjective Dispositions, Objective Circumstances, and Housing Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 118(1), pages 181-203, August.
    15. Feng Hu, 2013. "Homeownership and Subjective Wellbeing in Urban China: Does Owning a House Make You Happier?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(3), pages 951-971, February.
    16. Borgoni, Riccardo & Michelangeli, Alessandra & Pirola, Federica, 2018. "Residential Satisfaction for a Continuum of Households: Evidence from European Countries," GLO Discussion Paper Series 190, Global Labor Organization (GLO).
    17. repec:spr:qualqt:v:52:y:2018:i:2:d:10.1007_s11135-017-0492-9 is not listed on IDEAS
    18. Michal Rubaszek, 2017. "Reforming housing rental market in a life-cycle model," Working Papers 2017-028, Warsaw School of Economics, Collegium of Economic Analysis.
    19. Elias Soukiazis & Sara Ramos, 2016. "The Structure of Subjective Well-Being and Its Determinants: A Micro-Data Study for Portugal," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 126(3), pages 1375-1399, April.
    20. repec:spr:jhappi:v:18:y:2017:i:5:d:10.1007_s10902-016-9774-5 is not listed on IDEAS
    21. repec:gam:jsusta:v:9:y:2017:i:7:p:1214-:d:104509 is not listed on IDEAS

    More about this item

    Keywords

    Habitatge; Satisfacció; Benestar; Béns immobles; 332 - Economia regional i territorial. Economia del sòl i de la vivenda;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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