The Impact of Household Housing Unaffordability on Subjective Happiness: an Analysis of the Moderating Role of Amenities

Abstract This paper investigates the relationship between household housing unaffordability and subjective happiness in urban China. We propose a novel framework to measure household housing unaffordability as a form of long-run affordability pressure, by comparing the relative persistence of housing prices and resident incomes dynamics using fractional time series analysis. Using panel data from the China Household Finance Survey (CHFS) in 2015, 2017, and 2019, we employ the multilevel ordered logistic regression model to estimate the relationship between unaffordability and happiness. Our findings reveal a negative impact, suggesting that the deterioration of household unaffordability may reduce per capita living space and increase residential crowding, resulting in decreased levels of subjective happiness. Moreover, the level of local amenities is shown to exert a positive moderating effect on this impact. Analysis of different households indicates that highly educated households exhibit greater resilience to housing unaffordability, while high-income and local households are more sensitive to local amenity levels. These insights offer a fresh perspective for policymakers to effectively mitigate housing pressure and enhance societal welfare.