IDEAS home Printed from https://ideas.repec.org/p/ese/iserwp/2006-08.html
   My bibliography  Save this paper

The psychological costs of unsustainable housing commitments

Author

Listed:
  • P. Taylor, Mark
  • J. Pevalin, David
  • Todd, Jennifer

Abstract

We explore the impact of unsustainable housing commitments on psychological well-being using data from the British Household Panel Survey. We test the hypotheses that (i) housing payment problems, housing arrears and the threat of eviction and repossession have adverse impacts on heads of household’s psychological well-being over and above those caused by financial hardship and (ii) these impacts are larger for homeowners than for tenants. Our results indicate that for both men and women persistent housing payment problems have significant psychological costs. We find that for men entering arrears and the imminent threat of home loss has deleterious impacts on psychological health. The sizes of these effects are independent of and larger in magnitude to those associated with financial hardship more generally. We also find housing payment arrears have a significantly greater impact on psychological wellbeing among homeowners than tenants.

Suggested Citation

  • P. Taylor, Mark & J. Pevalin, David & Todd, Jennifer, 2006. "The psychological costs of unsustainable housing commitments," ISER Working Paper Series 2006-08, Institute for Social and Economic Research.
    • Handle: RePEc:ese:iserwp:2006-08
    as

    Download full text from publisher

    File URL: https://www.iser.essex.ac.uk/wp-content/uploads/files/working-papers/iser/2006-08.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Andrew E. Clark, 2003. "Unemployment as a Social Norm: Psychological Evidence from Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 289-322, April.
    2. Kau, James B. & Keenan, Donald C., 1999. "Patterns of rational default," Regional Science and Urban Economics, Elsevier, vol. 29(6), pages 765-785, November.
    3. Brown, Sarah & Taylor, Karl & Wheatley Price, Stephen, 2005. "Debt and distress: Evaluating the psychological cost of credit," Journal of Economic Psychology, Elsevier, vol. 26(5), pages 642-663, October.
    4. Brookes, Martin & Dicks, Mike & Pradhan, Mahmood, 1994. "An empirical model of mortgage arrears and repossessions," Economic Modelling, Elsevier, vol. 11(2), pages 134-144, April.
    5. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-659, May.
    6. Ettner, Susan L., 1996. "New evidence on the relationship between income and health," Journal of Health Economics, Elsevier, vol. 15(1), pages 67-85, February.
    7. Ecob, Russell & Davey Smith, George, 1999. "Income and health: what is the nature of the relationship?," Social Science & Medicine, Elsevier, vol. 48(5), pages 693-705, March.
    8. Lambrecht, Bart & Perraudin, William & Satchell, Stephen, 1997. "Time to default in the UK mortgage market," Economic Modelling, Elsevier, vol. 14(4), pages 485-499, October.
    9. Lea, Stephen E. G. & Webley, Paul & Levine, R. Mark, 1993. "The economic psychology of consumer debt," Journal of Economic Psychology, Elsevier, vol. 14(1), pages 85-119, March.
    10. Boheim, Rene & Taylor, Mark P., 2000. "My Home Was My Castle: Evictions and Repossessions in Britain," Journal of Housing Economics, Elsevier, vol. 9(4), pages 287-319, December.
    11. René Böheim & Mark P. Taylor, 2002. "Tied Down Or Room To Move? Investigating The Relationships Between Housing Tenure, Employment Status And Residential Mobility In Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(4), pages 369-392, September.
    12. Katharina Hauck & Nigel Rice, 2004. "A longitudinal analysis of mental health mobility in Britain," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 981-1001, October.
    13. Marmot, Michael & Ryff, Carol D. & Bumpass, Larry L. & Shipley, Martin & Marks, Nadine F., 1997. "Social inequalities in health: Next questions and converging evidence," Social Science & Medicine, Elsevier, vol. 44(6), pages 901-910, March.
    14. repec:bla:scotjp:v:49:y:2002:i:4:p:369-92 is not listed on IDEAS
    15. Arber, Sara, 1991. "Class, paid employment and family roles: Making sense of structural disadvantage, gender and health status," Social Science & Medicine, Elsevier, vol. 32(4), pages 425-436, January.
    16. Kau, James B. & Keenan, Donald C. & Muller III, Walter J. & Epperson, James F., 1995. "The Valuation at Origination of Fixed-Rate Mortgages with Default and Prepayment," The Journal of Real Estate Finance and Economics, Springer, vol. 11(1), pages 5-36, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Felipe Kast & Dina Pomeranz, 2013. "Saving More to Borrow Less: Experimental Evidence from Access to Formal Savings Accounts in Chile," Harvard Business School Working Papers 14-001, Harvard Business School, revised Jun 2014.
    2. Janet Currie & Erdal Tekin, 2015. "Is There a Link between Foreclosure and Health?," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 63-94, February.
    3. P. Jenkins, Stephen & Sacker, Amanda & P. Taylor, Mark, 2011. "Financial capability, income and psychological wellbeing," ISER Working Paper Series 2011-18, Institute for Social and Economic Research.
    4. Helena Tunstall & Niamh K Shortt & Jamie R Pearce & Richard J Mitchell, 2015. "Difficult Life Events, Selective Migration and Spatial Inequalities in Mental Health in the UK," PLOS ONE, Public Library of Science, vol. 10(5), pages 1-13, May.
    5. Leigh Ann Leung & Catherine Lau, 2017. "Effect of mortgage indebtedness on health of U.S. homeowners," Review of Economics of the Household, Springer, vol. 15(1), pages 239-264, March.
    6. Gilbertson, Jan & Grimsley, Michael & Green, Geoff, 2012. "Psychosocial routes from housing investment to health: Evidence from England's home energy efficiency scheme," Energy Policy, Elsevier, vol. 49(C), pages 122-133.
    7. Jens Kandt & Shu-Sen Chang & Paul Yip & Ricky Burdett, 2017. "The spatial pattern of premature mortality in Hong Kong: How does it relate to public housing?," Urban Studies, Urban Studies Journal Limited, vol. 54(5), pages 1211-1234, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. P. Jenkins, Stephen & Sacker, Amanda & P. Taylor, Mark, 2011. "Financial capability, income and psychological wellbeing," ISER Working Paper Series 2011-18, Institute for Social and Economic Research.
    2. Taylor, Mark P. & Jenkins, Stephen P. & Sacker, Amanda, 2011. "Financial capability and psychological health," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 710-723.
    3. Jones, Andrew M. & Wildman, John, 2008. "Health, income and relative deprivation: Evidence from the BHPS," Journal of Health Economics, Elsevier, vol. 27(2), pages 308-324, March.
    4. Boheim, Rene & Taylor, Mark P., 2000. "My Home Was My Castle: Evictions and Repossessions in Britain," Journal of Housing Economics, Elsevier, vol. 9(4), pages 287-319, December.
    5. Brown, Sarah & Taylor, Karl & Wheatley Price, Stephen, 2005. "Debt and distress: Evaluating the psychological cost of credit," Journal of Economic Psychology, Elsevier, vol. 26(5), pages 642-663, October.
    6. Gardner, Jonathan & Oswald, Andrew J., 2007. "Money and mental wellbeing: A longitudinal study of medium-sized lottery wins," Journal of Health Economics, Elsevier, vol. 26(1), pages 49-60, January.
    7. Benedicte Apouey & Andrew E. Clark, 2015. "Winning Big but Feeling no Better? The Effect of Lottery Prizes on Physical and Mental Health," Health Economics, John Wiley & Sons, Ltd., vol. 24(5), pages 516-538, May.
    8. Janine Aron & John Muellbauer, 2010. "Modelling and Forecasting UK Mortgage Arrears and Possessions," Economics Series Working Papers 499, University of Oxford, Department of Economics.
    9. Bunn, Philip & Haldane, Andrew & Pugh, Alice, 2020. "Has monetary policy made you happier?," Bank of England working papers 880, Bank of England.
    10. repec:hal:pseose:halshs-00566789 is not listed on IDEAS
    11. Matthias Keese & Hendrik Schmitz, 2014. "Broke, Ill, and Obese: Is There an Effect of Household Debt on Health?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(3), pages 525-541, September.
    12. Dora Gudmundsdottir, 2013. "The Impact of Economic Crisis on Happiness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(3), pages 1083-1101, February.
    13. Sarah Brown, 2015. "Household repayment behaviour and neighbourhood effects," Urban Studies, Urban Studies Journal Limited, vol. 52(6), pages 1169-1188, May.
    14. Aron, Janine & Muellbauer, John, 2016. "“Modelling and forecasting mortgage delinquency and foreclosure in the UK.”," Journal of Urban Economics, Elsevier, vol. 94(C), pages 32-53.
    15. Roberts, Jennifer & Hodgson, Robert & Dolan, Paul, 2011. "“It's driving her mad”: Gender differences in the effects of commuting on psychological health," Journal of Health Economics, Elsevier, vol. 30(5), pages 1064-1076.
    16. Dolan, Paul & Peasgood, Tessa & White, Mathew, 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, Elsevier, vol. 29(1), pages 94-122, February.
    17. Colantone, Italo & Crinò, Rosario & Ogliari, Laura, 2019. "Globalization and mental distress," Journal of International Economics, Elsevier, vol. 119(C), pages 181-207.
    18. Jorge E. Galán & Matías Lamas, 2019. "Beyond the LTV ratio: new macroprudential lessons from Spain," Working Papers 1931, Banco de España.
    19. John Gathergood, 2012. "Unemployment Expectations, Credit Commitments and Psychological Health," Discussion Papers 12/03, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    20. Hye Yoon Chung & Youjin Hahn, 2021. "Work Transitions, Gender, and Subjective Well-Being," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 16(5), pages 2085-2109, October.
    21. Lídia Farré & Francesco Fasani & Hannes Mueller, 2018. "Feeling useless: the effect of unemployment on mental health in the Great Recession," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-34, December.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ese:iserwp:2006-08. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jonathan Nears (email available below). General contact details of provider: https://edirc.repec.org/data/rcessuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.