Local House Prices and Mental Health

Posted: 30 Sep 2015

See all articles by Nayan Krishna Joshi

Nayan Krishna Joshi

Wayne State University - Department of Economics

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

Joshi, Nayan Krishna, Local House Prices and Mental Health (September 28, 2015). International Journal of Health Care Finance and Economics, 2015, Available at SSRN: https://ssrn.com/abstract=2666568

Nayan Krishna Joshi (Contact Author)

Wayne State University - Department of Economics ( email )

656 W. Kirby
Detroit, MI 48202
United States

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