Measuring Happiness: Controversial Study Argues that Renting Your Home Leads To More Wellbeing than Ownership
In a new study, Grace Wong Bucchianeri a professor of Real Estate at the University of Pennsylvania’s Wharton School, argues that home ownership leads to lower wellbeing than renting. Buccianeri measured intensity of emotion and life satisfaction as indicators of happiness, while controlling for health, income and quality of housing.
Traditionally, many argue that home ownership leads to happiness. Government policies, and family priorities, have been built-up to enable renters to become owners.
“The average homeowner, however, consistently derives more pain (but no more joy) from a house and home.” says the Buccianeri
In a description of her work:
Bucchianeri notes that without more careful analysis, important public policy matters, such as preserving the mortgage interest tax deduction or other support for housing programs, may be impacted by incomplete, or misleading, information.
Interestingly, Bucchianeri’s research is based on 2005 data collected before the housing crash. Even in a period of optimism about housing as a financial investment, she found that homeownership does not necessarily represent the fulfillment of a dream. “Overall, I found little evidence that homeowners are happier by any of the following definitions: life satisfaction, overall mood, overall feeling, general moment-to-moment emotions and affect at home,” Bucchianeri writes. “The average homeowner, however, consistently derives more pain (but no more joy) from a house and home.”
The study is already leading to pushback within the business community. The reader of a description of her study responded strongly, commenting:
“Since when was happiness a valid objective for a business school to measure? Also, the question that ran through my mind, as I read the article, is what was the point of even doing this research? “
The full study is available as a downloadable PDF from the author.
What do you think? Should business school professors pay attention to happiness? What implications does the study have for future policy-making? Please leave comments below.
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I guess everyone is different but buying my own home was one of the best things I ever did for myself. I live in San Francisco area and avoided constant increases in rent by chosing a 30 yr. fixed-rate mortgage.
Also, I love that I have my own personal space. I can paint it whatever color I want and change colors whenever I feel like it. I have the freedom to customize it and make it a reflection of my personal style — I consider it a reflection of who I am as a person.
I think the key is to avoid overextending finially to own a home. I made sure I bought a place that I could afford and so I don’t have any added financial stress.
Business schools are extremely interested in consumer happiness, aka utility. What kind of question is that?
John – thanks for your comment. I too was surprised that the reader was confused as to why a business school would measure happiness. As you point out, the business world has long been interested in the role consumer satisfaction/happiness/utility play in driving market forces.
Thanks for your comment.
khk – Thanks for your comment. As you point out, each personal situation is different. Do you think that this research finding — that homeowners are not generally happier than renters – should influence broad policy?
Hi Andrew — No, I do not think that one study should impact broad policy. I agree with those who are skeptical about it and think someone who is an expert in surveys should inspect that study more carefully. It does not in any way jive with my own person experiences (of renting or home ownership) or of many people I know.
By the way, it would be nice to get more information on the people running this website. Have you considered putting bios on the About Page?
khk – Thanks for your suggestion. We definitely will be adding bios and pictures to the “about us” section. In fact, we’re in the midst of a big overhaul to provide lots more information about our team and our company’s mission. Thanks for your comments, and for your use of happier.com.
Thanks for your coment khk, I agree that the whole overextending and buying what you can’t afford (hence the recession) is ultimately what causes stress and anxiety when dealing with home ownership. My family is rooted in the real estate business and I agree that when possible and appropriate, home ownership can be a great stress reliever compared to other aspects of life.