Does Homeownership improve personal wellbeing
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Does homeownership help people become better citizens, parents and neighbours? Advocates for promoting homeownership claim that ownership is linked to improved life outcomes for individuals as well as to more cohesive communities. It is argued that benefits may include better health and educational outcomes, greater security and independence, and more political and social participation. This paper uses longitudinal data from nine waves of the nationally representative Household Income and Labour Dynamics of Australia (HILDA) survey to examine the causal relationship between homeownership and a number of measures of personal wellbeing. In particular, we examine the impact of being a homeowner on life satisfaction, financial satisfaction, satisfaction with family relationships and mental health. We also examine impacts on time use and household expenditures. As HILDA follows all original sample members regardless of whether they have moved to other residences in Australia and collects detailed information about their current housing circumstances, we are able to estimate fixed effects regression models that allow us to control for unobservable differences in individuals that are related to both homeownership and personal wellbeing. This modelling approach allows us to potentially identify the causal relationship between homeownership and personal wellbeing. Our main analysis focuses on longitudinal samples of households that have maintained the same composition (‘single’ versus ‘couple’) over multiple waves of HILDA while potentially changing homeownership status. This allows us to isolate the impact of homeownership from the impact of changes in relationship status, which are often correlated. We then extend this analysis along a number of dimensions. First, we examine heterogeneity in impacts by gender, the presence of children and whether the change in homeownership status also entailed moving. Second, we examine whether impacts differ by housing costs. Third, we examine whether changes in homeownership have differential effects on individuals who also change couple status at the same time.