The perception of homeownership utility: Short-term and long-term effects

This paper investigates the effects of the ownership decision in the short-term and the long-term on subjective well-being. In the short-term, the subjective well-being score increases by about one point (on an eleven-point scale) on average, indicating the positive effects of ownership and confirming previous research. The long-term ownership effects, however, are considerably smaller, and owners perceive their subjective well-being to be about 0.7 points higher than before they bought their home. The results provide an explanation for this difference: individuals tend to adapt to their new housing situations after they have bought a home. The size of these ownership effects varies across different groups.