Does happiness dwell in an owner-occupied house? Homeownership and subjective well-being in urban China

Abstract

This study investigates the causal relationship between homeownership and subjective well-being based on household-level panel data collected from the China Household Finance Survey (CHFS) in 2011 and 2013. The extent to which homeownership contributes to the changes in subjective well-being is estimated, focusing on the heterogeneous effects across socioeconomic and demographic groups. Evidence from the identification strategies indicates that homeownership has a positive impact on subjective well-being. Moreover, the results are robust to different specifications and unaffected by the financial constraints faced by new homeowners. Our findings have useful implications for policymakers to stimulate homeownership rates to promote subjective well-being.