SpringerLink
Log in

Effects of housing wealth on subjective well-being in urban China

  • Article
  • Published:
Journal of Housing and the Built Environment Aims and scope Submit manuscript

Abstract

Homeownership means not only having a permanent residence but also generating a considerable financial gain from house value appreciation. This study investigates how housing characteristics affect individuals’ subjective well-being (SWB) in China by using 2011 China Household Finance Survey data. The findings suggest that the channel through which housing characteristics significantly affect SWB mainly depends on housing assets. House value appreciation significantly improves SWB; however, housing debt does not affect the role of house value in SWB. Furthermore, housing wealth has a more significant impact on SWB for low-income homeowners and those living in the eastern region of China. Our findings shed light on potential solutions to enhance the SWB of urban residents. In particular, the government should pay more attention to raising their life satisfaction under the background of high house prices.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. Indeed, rapid price appreciation will accumulate household wealth and optimize the portfolio allocation, thereby serving as collateral for households who live in their own homes (Flavin and Yamashita 2011).

  2. The CHFS has conducted several follow-up surveys since 2011; however, only the 2011 wave is publicly available.

  3. The CHFS 2011 was conducted by the Survey and Research Center for China Household Finance, a non-profit institute for academic inquiry based at Southwestern University of Finance and Economics, in summer 2011.

  4. There are 31 provinces in Mainland China. The three missing provinces in the survey are **njiang, Tibet, and Inner Mongolia. The omission of these three provinces does not affect the national representativeness of the survey, as the population in these regions only accounts for a very small proportion of the whole nation.

  5. Because age might have a non-linear relationship with SWB (Chyi and Mao 2012; Hu 2013), both age and age squared are included in the model.

References

  • Andre, S., Dewilde, C., & Muffels. R. (2017). Do housing wealth and tenure (change) moderate the relationship between divorce and subjective well-being. HOWCOME working paper series.

  • Balfour, D. L., & Smith, J. L. (1996). Transforming lease-purchase housing programs for low income families: Towards empowerment and engagement. Journal of Urban Affairs, 18(2), 173–188.

    Article  Google Scholar 

  • Becchetti, L., & Pisani, F. (2012). Family money, relational life and (class) relative wealth: An empirical analysis on life satisfaction of secondary school students. SSRN Electronic Journal, 20(35), 749–761.

    Google Scholar 

  • Brooks, C. (2008). Introductory econometrics for finance (2nd ed.). Cambridge: Cambridge University of Press.

    Book  Google Scholar 

  • Brown, S., Taylor, K., & Price, S. W. (2005). Debt and distress: Evaluating the psychological cost of credit. Journal of Economic Psychology, 26(5), 642–663.

    Article  Google Scholar 

  • Bucchianeri, G. W. (2009). The American dream? The private and external benefits of homeownership. Working paper.

  • Campbell, J. Y., & Cocco, J. F. (2007). How do house prices affect consumption? Evidence from micro data. Journal of Monetary Economics, 54(3), 591–621.

    Google Scholar 

  • Case, K. E., & Quigley, J. M. (2008). How housing booms unwind: Income effects, wealth effects, and feedbacks through financial markets. European Journal of Housing Policy, 8(2), 161–180.

    Article  Google Scholar 

  • Cheng, Z., King, S. P., Smyth, R., & Wang, H. (2016). Housing property rights and subjective well-being in urban China. European Journal of Political Economy, 45(Supplement), 160–174.

    Article  Google Scholar 

  • Chivakul, M., Lam, W. R., Liu, X., Maliszewski, W., & Schipke, A. (2015). Understanding residential real estate in China. IMF working paper no. 15–84.

  • Chyi, H., & Mao, S. (2012). The determinants of happiness of China’s elderly population. Journal of Happiness Studies, 13(1), 167–185.

    Article  Google Scholar 

  • Clapham, D. (2010). Happiness, well-being and housing policy. Policy and Politics, 38(2), 253–267.

    Article  Google Scholar 

  • Clapham, D., Foye, C., & Christian, J. (2018). The concept of subjective well-being in housing research. Housing Theory & Society, 35(3), 261–280.

    Article  Google Scholar 

  • Clark, A. E., Diener, E., Georgellis, Y., & Lucas, R. E. (2008). Lags and leads in life satisfaction: A test of the baseline hypothesis. Economic Journal, 118(529), 222–243.

    Article  Google Scholar 

  • Davies, J. B., Sandstrom, S., Shorrocks, A., & Wolff, E. N. (2011). The level and distribution of global household wealth. Economic Journal, 121(551), 223–254.

    Article  Google Scholar 

  • Diaz-Serrano, L. (2009). Disentangling the housing satisfaction puzzle: Does homeownership really matter? Journal of Economic Psychology, 30(5), 745–755.

    Article  Google Scholar 

  • Diaz-Serrano, L., & Stoyanova, A. P. (2009). Mobility and housing satisfaction: An empirical analysis for 12 EU countries. Journal of Economic Geography, 10(5), 661–683.

    Article  Google Scholar 

  • Dietz, R. D., & Haurin, D. R. (2003). The social and private micro-level consequences of homeownership. Journal of Urban Economics, 54(3), 401–450.

    Article  Google Scholar 

  • Dolan, P., Peasgood, T., & White, M. (2008). Do we really know what makes us happy? A review of the economic literature on the factors associated with subjective well-being. Journal of Economic Psychology, 29(1), 94–122.

    Article  Google Scholar 

  • Dunn, J. R. (2000). Housing and health inequalities: Review and prospects for research. Housing Studies, 15(3), 341–366.

    Article  Google Scholar 

  • Elsinga, M., & Hoekstra, J. (2005). Homeownership and housing satisfaction. Journal of Housing and the Built Environment, 20(4), 401–424.

    Article  Google Scholar 

  • Fang, H., Gu, Q., **ong, W., & Zhou, L.-A. (2015). Chapter 2: Demystifying the Chinese housing boom. In M. Eichenbaum & J. Parker (Eds.), NBER macroeconomics annual 2015 (Vol. 30, pp. 105–166). Chicago: University of Chicago Press.

    Google Scholar 

  • Flavin, M., & Yamashita, T. (2011). Owner-occupied housing: Life-cycle implications for the household portfolio. The American Economic Review, 101(3), 609–614.

    Article  Google Scholar 

  • Florida, R., Mellander, C., & Rentfrow, P. J. (2013). The happiness of cities. Regional Studies, 47(4), 613–627.

    Article  Google Scholar 

  • Foye, C. (2017). The relationship between size of living space and subjective well-being. Journal of Happiness Studies, 18(2), 427–461.

    Article  Google Scholar 

  • Foye, C., Clapham, D., & Gabrieli, T. (2018). Home-ownership as a social norm and positional good: Subjective wellbeing evidence from panel data. Urban Studies, 55(6), 1290–1312.

    Article  Google Scholar 

  • Galster, G. C. (1987). Identifying the correlates of dwelling satisfaction: An empirical critique. Environment and Behavior, 19(5), 537–568.

    Article  Google Scholar 

  • Gan, J. (2010). Housing wealth and consumption growth: Evidence from a large panel of households. Review of Financial Studies, 23(6), 2229–2267.

    Google Scholar 

  • Gan, L., Yin, Z., & Jia, N. (2013). Data you need to know about China: Research report of China household finance survey 2012. New York: Springer.

    Google Scholar 

  • Graham, E., Manley, D., Hiscock, R., Boyle, P., & Doherty, J. (2009). Mixing housing tenures: Is it good for social well-being? Urban Studies, 46(1), 139–165.

    Article  Google Scholar 

  • Green, R. K. (2001). Homeowning, social outcomes, tenure choice, and U.S. housing policy. Cityscape, 5(2), 21–29.

    Google Scholar 

  • Green, R. K., & White, M. J. (1997). Measuring the benefits of homeowning: Effects on children. Journal of Urban Economics, 41(3), 441–461.

    Article  Google Scholar 

  • Greene, W. H. (2012). Econometric analysis (7th ed.). New York: Pearson Education International.

    Google Scholar 

  • Hamoudi, A., & Dowd, J. B. (2014). Housing wealth, psychological well-being, and cognitive functioning of older Americans. Journals of Gerontology, 69(2), 253–262.

    Article  Google Scholar 

  • Haurin, D. R., Parcel, T. L., & Haurin, R. J. (2002). Does homeownership affect child outcomes? Real Estate Economics, 30(4), 635–666.

    Article  Google Scholar 

  • Headey, B., & Wooden, M. (2004). The effects of wealth and income on subjective well-being and ill-being. Economic Record, 80(s1), S24–S33.

    Article  Google Scholar 

  • Herbers, D. J., & Mulder, C. H. (2017). Housing and subjective well-being of older adults in Europe. Journal of Housing and the Built Environment, 32(3), 1–26.

    Article  Google Scholar 

  • Hu, F. (2013). Homeownership and subjective wellbeing in urban China: Does owning a house make you happier? Social Indicators Research, 110(3), 951–971.

    Article  Google Scholar 

  • Kingston, P. W., & Fries, J. C. (1994). Having a stake in the system: The sociopolitical ramifications of business and home ownership. Social Science Quarterly, 75(3), 679–686.

    Google Scholar 

  • Knight, J., & Gunatilaka, R. (2010). Great expectations? The subjective well-being of rural–urban migrants in China. World Development, 38(1), 113–124.

    Article  Google Scholar 

  • Knight, J., & Gunatilaka, R. (2011). Does economic growth raise happiness in China? Oxford Development Studies, 39(01), 1–24.

    Article  Google Scholar 

  • Knight, J., Song, L., & Gunatilaka, R. (2009). Subjective well-being and its determinants in rural China. China Economic Review, 20(4), 635–649.

    Article  Google Scholar 

  • Li, T., Shi, Y., & Chen, B. (2011). Homeownership and happiness: Theory and evidence from China. Economic Research Journal, 9, 69–82.

    Google Scholar 

  • Liang, P., & Guo, S. (2015). Social interaction, Internet access and stock market participation—An empirical study in China. Journal of Comparative Economics, 43(4), 883–901.

    Article  Google Scholar 

  • Lin, J., Zhou, S., & Wei, W. (2012). Prices of urban real estate, housing property and subjective well-being. Finance & Trade Economics, 5, 114–120.

    Google Scholar 

  • Muellbauer, J., & Murphy, A. (2008). Housing markets and the economy: The assessment. Oxford Review of Economic Policy, 24(1), 1–33.

    Article  Google Scholar 

  • Nakazato, N., Schimmack, U., & Oishi, S. (2011). Effect of changes in living conditions on wellbeing: A prospective top-down bottom-up model. Social Indicators Research, 100, 115–135.

    Article  Google Scholar 

  • Nettleton, S., & Burrows, R. (1998). Mortgage debt, insecure home ownership and health: An exploratory analysis. Sociology of Health & Illness, 20(5), 731–753.

    Article  Google Scholar 

  • Nettleton, S., & Burrows, R. (2000). When a capital investment becomes an emotional loss: The health consequences of the experience of mortgage possession in England. Housing Studies, 15(3), 463–478.

    Article  Google Scholar 

  • Oswald, F., Wahl, H. W., Mollenkopf, H., & Schilling, O. (2003). Housing and life satisfaction of older adults in two rural regions in Germany. Research on Aging, 25(2), 122–143.

    Article  Google Scholar 

  • Ratcliffe, A. (2010). Housing wealth or economic climate: Why do house prices matter for well-being? Working paper, Centre for Market & Public Organisation.

  • Ratcliffe, A. (2015). Wealth effects, local area attributes, and economic prospects: On the relationship between house prices and mental wellbeing. Review of Income & Wealth, 61(1), 75–92.

    Article  Google Scholar 

  • Rentfrow, P. J., Mellander, C., & Florida, R. (2009). Happy states of America: A state-level analysis of psychological, economic, and social well-being. Journal of Research in Personality, 43(6), 1073–1082.

    Article  Google Scholar 

  • Rohe, W. M., & Basolo, V. (1997). Long-term effects of homeownership on the self-perceptions and social interaction of low-income persons. Environment & Behavior, 29(6), 793–819.

    Article  Google Scholar 

  • Rohe, W. M., & Stegman, M. A. (1994). The impact of home ownership on the social and political involvement of low-income people. Urban Affairs Quarterly, 30(1), 152–172.

    Article  Google Scholar 

  • Rossi, P. H., & Weber, E. (1996). The social benefits of homeownership: Empirical evidence from national surveys. Housing Policy Debate, 7(1), 1–35.

    Article  Google Scholar 

  • Searle, B. A., Smith, S. J., & Cook, N. (2009). From housing wealth to well-being? Sociology of Health & Illness, 31(1), 112–127.

    Article  Google Scholar 

  • Senik, C. (2014). Wealth and happiness. Oxford Review of Economic Policy, 30(1), 92–108.

    Article  Google Scholar 

  • Stutzer, A., & Frey, B. S. (2002). What can economists learn from happiness research? Journal of Economic Literature, 40(2), 402–435.

    Article  Google Scholar 

  • Sun, W., & Zheng, S. (2013). Housing and happiness: From the perspectives of house value, property type and entry time. Inquiry into Economic Issues, 3, 1–9.

    Google Scholar 

  • Taylor, M. P., Pevalin, D. J., & Todd, J. (2007). The psychological costs of unsustainable housing commitments. Psychological Medicine, 37(7), 1027–1036.

    Article  Google Scholar 

  • Tong, H., & **a, P. (2018). Housing property rights, price expectations and residents’ subjective well-being. Journal of Qiqihar University, 3, 68–72.

    Google Scholar 

  • Zhang, X., Li, L., Chai, C., & Ma, S. (2015). Housing increases happiness: Investment attribute or residential attribute? Journal of Financial Research, 10, 17–31.

    Google Scholar 

  • Zhang, Y., Mao, D., Ning, Y., & **, Z. (2017). The effect of housing property right on Bei**g residents’ subjective well-being. China Real Estate, 6, 14–25.

    Google Scholar 

  • Zhang, F., Zhang, C., & Hudson, J. (2018). Housing conditions and life satisfaction in urban China. Cities, 81(2018), 35–44.

    Article  Google Scholar 

  • Zhou, Y., **ao, Z., & Yu, W. (2017). Inflation, housing property and subjective well-being of Chinese urban residents. China Economic Studies, 3, 50–63.

    Google Scholar 

  • Zumbro, T. (2014). The relationship between homeownership and life satisfaction in Germany. Housing Studies, 29(3), 319–338.

    Article  Google Scholar 

Download references

Funding

This paper supported by National Natural Science Foundation of China (71774057) and Youth Fund Projects in Humanities and Social Science Research of Ministry of Education (15YJC790140).

Author information

Authors and Affiliations

  1. China Institute for Urban Governance & School of International and Public Affairs, Shanghai Jiao Tong University, Shanghai, China

    Chuanyong Zhang

  2. Department of Finance, School of Economics, Faculty of Economics and Management, East China Normal University, Shanghai, China

    Fang Zhang

Authors
  1. Chuanyong Zhang
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Fang Zhang
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Fang Zhang.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendix

Appendix

Variables

Question code

Questions

Answers

2011 CHFS Questionnaire

 Subjective wellbeing

  SWB

A4011c

Overall, do you feel happy now?

1. Very happy; 2. Happy; 3. Normal; 4. Unhappy; 5. Very unhappy

 Individual characteristics

  Gender

A2003

Gender

1. Male; 2. Female

  Age

A2005

Date of Birth

d/m/y

  Education (Edu)

A2012

What’s the education level?

1. No schooling at all; 2 Primary school; 3. Junior high school; 4. Senior high school; 5. Technical high school; 6. College/Vocational school; 7. Bachelor degree; 8. Master degree; 9. Doctor degree

  Migration

A2018

Is Hukou registered in the villages/streets/towns where you currently live?

1. Yes; 2. No

  Married

A2024

What’s the marital status at present?

1. Unmarried; 2. Married; 3. Cohabitation; 4. Separated; 5. Divorced; 6. Widowed

  Job

A3000

Do you have a job, including individual business, online-shop, farming, hel** with the family business or agricultural production, freelancer, doing odd jobs?

1. Yes; 2. No

  Health

F2021

What’s your health status compared with your peers?

1. Very good; 2. Good; 3. Normal; 4. Bad; 5. Very bad

 Household characteristics

  Household income (income)

A3020

What’s your total income last year?

yuan

  Family size

A2000

How many family members do you have?

/

  Family financial wealth (financial wealth)

/

Comprehensive financial assets held by households such as cash, stocks, funds, bonds, etc.

yuan

 Housing characteristics

  Homeownership

C2001

Do you have your own house?

1. Yes; 2. No

  Multiple properties (Mp)

C2002

How many houses does your family possess?

/

  House area

C2003a

What is the floor area of this house?

m2

  Distance

C2010

How long time does it take from the house to the city/town center?

Minute

  Time of buying this house

C2012

Which year did you purchase this house?

/

  Local house

C2009a

Whether do you own a local house or not?

1. Yes; 2. No

  House value at the time of purchase (old house value)

C2013

What is the purchase price of the house?

yuan

  Current house value (house value)

C2016

How much is the imputed value of this house now?

yuan

  Housing price

C2016/C2003a

Imputed value of this house/the floor area of this house

yuan/m2

  Housing debt (debt)

C2024

Does the family have any outstanding loans for purchasing, decorating, remodeling, or expanding the house?

1. Yes; 2. No

  1. In China’s special Household Registration System, migrants without the official transformation of household registration (Hukou) are defined as a “floating” population and usually excluded from the urban population in the official statistical survey and census in China

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Zhang, C., Zhang, F. Effects of housing wealth on subjective well-being in urban China. J Hous and the Built Environ 34, 965–985 (2019). https://doi.org/10.1007/s10901-019-09651-5

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10901-019-09651-5

Keywords

Search

Navigation