Your House, Your Car, Your Education: The Socioeconomic Situation of the Neighborhood and its Impact on Life Satisfaction in Germany

Abstract

This study deals with the impact of socioeconomic conditions and social integration into a local neighborhood on individual life satisfaction in Germany. While the majority of ecological studies to date are based on very broad neighborhood concepts, using large research units for defining neighborhood the present study contains micro-geographic information on a representative sample of private households in Germany, including features of their respective residential environments. The data was derived from the German Socio-Economic Panel (SOEP) study and enriched with data from the Micromarketing-Systeme and Consult GmbH (microm) for the years 2000–2006. Our analyses reveal neighborhood effects on various facets of life satisfaction. Controlling for several covariates at the household and individual level, life satisfaction increases when a person lives in a neighborhood with a higher socioeconomic status. In addition, the individual gap between a person’s economic status and the status of the neighborhood also affects individual well-being. However, when comparing with other neighborhood aspects, the strongest effects on individual life satisfaction have social networks.