Well-being and Housing Market Indicators in Hawaii

Abstract

This technical report summarizes how neighborhood housing price appreciation can impact the quality of life beyond individual-level impacts. Using the ZTRAX database in 1995 - 2017 provided by Zillow, we develop plausibly unbiased housing measures - price appreciation and sales volume curves - for each area in the state of Hawaii. We then combine ZTRAX with the Gallup data and American Community Survey data in the period of 2008-2017 to examine whether the variation in housing price appreciation, sales volume, or tenure changes are independently associated with the well-being net of individual characteristics. We estimate these correlations in two separate ways, including a standard area fixed effects model and a residual approach. We find evidence that areas with high housing prices contain happier people, but only because those people are more wealthy. In addition, people who have just relocated into a neighborhood seem to be happier than those who have been there for some time. Homeownership does not appear to be significantly associated with well-being beyond its correlation with individual characteristics. There may be a negative association between increasing housing prices and well-being, but given the small sample, our data is not able to detect a statistically significant association. For a comprehensive picture, this report should be read in concert with the paper “Drivers of well-being in Hawaii - Quantifying individual and community impacts” (Love and Garboden, 2019).