Disentangling the housing satisfaction puzzle: Does homeownership really matter?

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.

The Size of the Rental Market and Housing Market Fluctuations

“…Second, it is important to remember that the tenure choice is strongly affected by non-financial factors. It can be claimed that households derive greater utility from living in an owned rather than rented apartment, as confirmed by the empirical studies of Elsinga and Hoekstra (2005) and Diaz-Serrano (2009). In this respect it is important to create conditions in which property owners are considering renting as an acceptable alternative.…”

Who Settles for Less? Subjective Dispositions, Objective Circumstances, and Housing Satisfaction

“…The 'actual-aspirational gap' framework can be adapted for the study of housing satisfaction (Francescato et al 1974) and has been used in existing empirical housing studies (Campbell et al 1976;Galster 1987;Weidemann & Anderson 1985, Diaz-Serrano 2009 …”

Home Sweet Home: The Determinants of Residential Satisfaction and its Relation with Well-being

“…• Home owners are normally more satisfied with their homes and their neighbours than renters (Rohe and Basolo, 1997;Elsinga and Hoekstra, 2005;Shlay, 2006;Diaz-Serrano, 2009). …”