On the Economics of Health in Homes

Working paper

12-01-17 |

The health effects of outdoor climate and air pollution have been well researched, but in developed countries, citizens spend most of their time indoors, particularly in their own home. This paper investigates the link between indoor housing conditions and occupants´ health, using a high-quality longitudinal dataset of approximately 25,000 German households. Our analyses show that individuals living in worse-maintained homes tend to report a higher number of bad-health symptoms, even after controlling for social economic status and health-affecting life style choices. Those individuals also experience an increase in their demand for health care of 12 percent, as reflected in the number of visits to the doctor. We document that the detrimental effect of poor housing quality on the demand for health care mostly stem from women, who visit their doctor up to 22 percent more often if they live in poorly maintained homes, that the effect is not present for age groups under 40, and that it gets quite strong for age groups over 51. For these age groups, occupants of homes needing a major renovation visit the doctor about 30 percent more often than those living in homes in good condition.

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