Local House Prices and Mental Health
Posted: 30 Sep 2015
Date Written: September 28, 2015
Abstract
This paper examines the impact of local (county-level) house prices on individual self-reported mental health using individual level data from the United States Behavioral Risk Factor Surveillance System between 2005 and 2011. Exploiting a fixed-effects model that relies on within-county variations, relative to the corresponding changes in other counties, I find that while individuals are likely to experience worse self-reported mental health when local house prices decline, this association is most pronounced for individuals who are least likely to be homeowners. This finding is not consistent with a prediction from a pure wealth mechanism but rather with the hypothesis that house prices act as an economic barometer. I also demonstrate that the association between self-reported mental health and local house prices is not driven by unemployment or foreclosure. The primary result - that lower local house prices have adverse impact on self-reported mental health of homeowners and renters - is consistent with studies using data from the United Kingdom.
Keywords: wealth, mental health, house prices, fixed effects model
JEL Classification: D12, I0
Suggested Citation: Suggested Citation