Health Implications of Housing Programs: Evidence from a Population-Wide Weatherization Program

Abstract

Can better housing protect us from extreme weather conditions? Although economists and policymakers are certain about the health implications of housing upgrades, empirical evidence is largely missing or based on small-scale experiments in developing countries. This study provides population-representative quasi-experimental estimates based on the renovation program which renovated half of the East German housing portfolio in the aftermath of the German reunification. During the 1990s, the German government devoted significant financial resources to upgrade the insulation and heating systems of over 3.6 million dwellings in East Germany. We link the renovations to individual demand for health care of occupants using the German Socio-Economic household Panel (SOEP), as well as administrative records from the German hospital statistic. Relying on a fixed effect strategy, exploiting the staggered roll-out of the renovation program, our results show that an improvement in housing quality enhances the health of vulnerable age groups. Evidence from hospital records suggests that the reduction in hospitalization is driven by lowering the risk of cardiovascular problems for older individuals (45 years or older), and mainly driven by days with extremely high and low ambient temperatures. Our findings have strong policy implications and can enrich cost-benefit analysis of public investments in weatherization programs.

Keywords: Housing quality, renovation program, health

JEL Classification: H54, I18, R21, R23, R38