In Debt but Still Happy? Examining the Relationship between Homeownership and Life Satisfaction

Sebastian Will () and Timon Renz

ERES from European Real Estate Society (ERES)

Abstract: The present study analyses the relationship between home tenure status and life satisfaction applying fixed-effects regressions. Using data from the German Socio-Economic Panel from 1984 to 2018, we first find that compared to renting a home, owning one has an overall significant positive effect on life satisfaction. Hereby, we confirm results of already existing studies. Secondly, by examining homeowners and their different financing conditions more closely, we show that having a real estate loan impacts homeowners’ life satisfaction negatively by 0,048 points on a 10-point Likert scale. Taken together, these two antagonistic effects sum up to a null effect, which opposes most of the conclusions of related literature. By choosing to compare indebted homeowner, and not homeowners in general, to renters, we intend to contribute to a more thorough understanding of the effects of tenure status on life satisfaction. Additionally, we examine the temporal effects five years before and after the change in tenure status. As we obtain mixed results, the effects of anticipation and adaptation of life satisfaction remain to be further investigated.

Keywords: financing conditions; Homeownership; Life Satisfaction (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2021-01-01
New Economics Papers: this item is included in nep-eur, nep-isf and nep-ure
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Related works:
Working Paper: In Debt but Still Happy? Examining the Relationship Between Homeownership and Life Satisfaction (2023)
Working Paper: In Debt but Still Happy? – Examining the Relationship Between Homeownership and Life Satisfaction (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2021_89

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