Effect of mortgage indebtedness on health of U.S. homeowners

TitleEffect of mortgage indebtedness on health of U.S. homeowners
Publication TypeJournal Article
Year of Publication2017
AuthorsLeung, LA, Lau, C
JournalReview of Economics of the Household
Date PublishedJan-03-2017
ISSN Number1569-5239
KeywordsDebt, Economics, Health Conditions and Status, Housing, Mortgages, Older Adults

This paper examines the effect of excessive mortgage indebtedness on health among homeowners using nine waves of the Health and Retirement Study from 1992 to 2008. Health status is measured by subjective well-being, number of depressive symptoms, and incidence of hypertension. Using average annual state-level home prices as an instrument, we attempt to identify the causal effect in an panel IV framework. Results from the panel IV estimations suggest that having a high mortgage loan to home value (LTV), defined as LTV at or above 80 %, leads to more depressive symptoms and a higher incidence of hypertension, but has no effect on subjective well-being. Since the results from panel estimations did not show that debt affects health, whether the panel IV results demonstrate a causal relationship depends critically on the exclusion assumption.

Short TitleRev Econ Household
Citation Key8923