House Price Expectations, Mortgages, and Subjective Well‐being in Urban China

Abstract

This study aims at investigating the roles of house price expectations and mortgages in urban dwellers` subjective well-being (SWB) in China. Using 3,717 urban householder respondents collected in the 2011 China Household Finance Survey and categorizing the sample into three subsamples: homeowners without and with a home loan, and nonhomeowners, the ordered logit models of the ordinal-dependent variable SWB with and without considering the endogeneity problem are estimated using these three subsamples separately. The primary finding is that house price expectations have a negative influence on the likelihood of having a better SWB only for homeowners without a home loan. However, more houses can mitigate this negative influence. For homeowners with a home loan, mortgages have a negative impact on the likelihood of having a better SWB. Finally, the Beijing sample based on the 2017 data also supports the influences of house price expectations and mortgages on SWB.