Home sweet home : the determinants of residential satisfaction and its relation with well-being

Housing is a core element of people’s material living standards. It is essential to meet basic needs, such as for shelter from weather conditions, and to offer a sense of personal security, privacy and personal space. Good housing conditions are also essential for people’s health and affect childhood development. Further, housing costs make up a large share of the household budget and constitute the main component of household wealth. Residential satisfaction is a broad concept, and is associated with multidimensional aspects including physical, social, and neighbourhood factors, as well as psychological and sociodemographic characteristics of the residents. By taking advantage of two household surveys (the EU-SILC ad hoc module on housing for European countries; and the Gallup World Poll for OECD countries and other major economies), this paper uses ordered probit analysis to explore the link between households’ residential satisfaction and a number of variables related to individuals, the households to which they belong, and the characteristics of the dwelling and neighbourhood where they live. The major findings of this analysis show a complex relationship between residential satisfaction and housing characteristics including neighbourhood’s features. Individual and household socio-demographic characteristics (e.g. age, gender, education) play a secondary role once dwelling and neighbourhood features are controlled for. Understanding the factors that lead to satisfaction with housing and residential environment is key for planning successful and effective housing policies.