Housing affordability and mental health: Do definitions matter?

Abstract: Housing affordability is an increasingly discussed political and economic issue. Recent research finds a negative relationship between housing affordability and mental health. Much of the prior research uses a ratio measurement for housing affordability. Using alternative measures of housing affordability, I re-examine the relationship between housing affordability and mental health. A fixed effects approach using a residual income measure of housing affordability does not find a significant relationship between housing affordability and mental health. Interestingly, the results are significant for females, when the regressions are run separately for males and females, but not for males. A large and significant relationship with mental health is found from questions on household’s ability to pay either housing costs or household bills. The results suggest that conventional measures of housing affordability may not identify a large portion of the population who have troubles paying for either housing costs or major bills and therefore underestimate the prevalence of mental health issues related to housing affordability.