Home-ownership as a social norm and positional good: Subjective wellbeing evidence from panel data
David Clapham and
Tommaso Gabrieli ()
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Chris Foye: University of Reading, UK
David Clapham: University of Reading, UK
Urban Studies, 2018, vol. 55, issue 6, 1290-1312
Much attention has been devoted to examining the absolute benefits of home-ownership (e.g. security and autonomy). This paper, by contrast, is concerned with conceptualising and testing the relative benefits of home-ownership; those benefits that depend on an individualâ€™s status in society. Home-ownership has previously been analysed as a social norm, implying that the relative benefits (costs) associated with being an owner (renter) are positively related to relevant othersâ€™ home-ownership values. The theoretical contribution of this paper is to additionally conceptualise home-ownership as a positional good, implying that the status of both home-owners and renters is negatively related to relevant othersâ€™ home-ownership consumption. The empirical contribution of this paper is to quantitatively test for these relative benefits in terms of subjective wellbeing. We run fixed effects regressions on three waves of the British Household Panel Study. We find that (1) a strengthening of relevant othersâ€™ home-ownership values is associated with increases (decreases) in the subjective wellbeing of home-owners (renters), and (2) an increase in relevant othersâ€™ home-ownership consumption decreases the life satisfaction of owners but has no effect for renters. Overall our findings suggest that (1) the relative benefits of home-ownership are both statistically significant and of a meaningful magnitude, and (2) home-ownership is likely to be both a social norm and a positional good. Without explicitly recognising these relative benefits, policymakers risk overestimating the contribution of home-ownership to societal wellbeing.
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Persistent link: https://EconPapers.repec.org/RePEc:sae:urbstu:v:55:y:2018:i:6:p:1290-1312
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