Abstract
According to previous studies, it is known that socioeconomic status is a major determinant of happiness level. However, there are few studies on which criteria an individual person judges their own socioeconomic status based on. The purpose of this study is to find relationship between housing and people’s subjective socioeconomic status, considering the unique circumstance of Korea, where the majority of household assets is real estate and the majority of real estate is a house. According to the analysis of the long-term panel data (2005 to 2019 with 197,970 samples) from the Korean Labor and Income Panel Study, it is shown that people value their socioeconomic status 1.79 times higher than before at the time when they own a house and expect that the status may improve 1.27 times more in the future. In addition, the same thing happens when a house price increases. The findings can be used to identify a cause of the wealth effect, under which people increase consumption when the value of real estate rises even if there is no cash inflow.
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