Naoyuki Yoshino (Dean, ADBI)

Matthias Helble (Research Fellow, ADBI)

22/05/2015, ADB
Disclaimer: The views expressed in this paper/presentation are the views of the author and do
not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board
of Governors, or the governments they represent. ADB does not guarantee the accuracy of the
data included in this paper and accepts no responsibility for any consequence of their use.
Terminology used may not necessarily be consistent with ADB official terms.

Contents
Basic facts about ADBI
II. Housing policies for emerging Asia
III. Homeownership and health
IV. Future research on housing and
health
I.

I. ADB Institute Basic facts

Founded in 1996 as think tank of ADB

Located in Tokyo
Number of staff: About 60 (14 professionals)
Head: Dean Naoyuki Yoshino
Two main areas of work: Research & capacity building
Current research topics:
Infrastructure (economic impact)
SME
Financial inclusion
Housing policies (flagship) started Dec. 2014

Central-local governance (flagship) starting now

II. Housing Policies Project: Rationale

Housing as fundamental need (food, clothing & shelter)
Benefits of access to adequate housing for household:
Improved health (infectious and non-infectious diseases)
Better educational achievements
Contributes to social cohesion and social security
Benefits for economy:
Construction multiplier
Small business aspect (place of employment/collateral)
But: Difficulties throughout Asia in providing enough

affordable and adequate housing.

Research objective: Assist in developing policies to facilitate
access to affordable and adequate housing.

II. Housing Policies: Increasing urbanization

Figure: Urban and rural population as proportion of total population (19502050)

Source: UN (2014)

II. Housing Policies: Increasing urbanization

Figure: Urban and rural population as proportion of total population (19502050)

Source: UN (2014)

II. Housing Policies: Increased property prices

Figure: Price to Income Ratio in 20 most expensive cities in the world
100
90

86.25

80
70
60
50
40

50.36
40.67

36.83

36.53

35.14

33.06

32.54

32.15

31.1

31.1

30.57

30

30.5

28.8

27.86

20
10
0

Price to Income Ratio

Source: Numbeo Property Prices Index (2015)

27.59

26.68

26.02

25.82

25.79

II. Housing policies: Increasing inequality.

Figure: Gini Coefficients vs GDP per capita in 7 most populous DMCs (19902012)

Source: Authors calculations based on SWIID and World Bank

II. Housing Policies: The Context

Urbanization

Infrastructure

Health

Legal
Framework

Employment

Environment

II. Housing Policies: Project Overview

Events:
Brainstorming workshop (Dec. 2014)
Inception workshop (May 2015)
Housing policies conference (Sept. 2015) focus on policy
makers
Knowledge products:
Working papers (inhouse and by external experts)
Book on housing policies for emerging Asia (end 2015)
Conference volume

II. Project Overview: Book

PART 1: Overview, Modelling Framework and Context
Overview
Housing Policy Matrix
Demand and Supply Model of Housing Policies
Housing Policies and Urbanization (jointly with ADB)
Housing and Health (jointly with ADB)
PART 2: Country Studies
Advanced countries: Japan, Rep. of Korea, Singapore,
CH, UK, and US
Emerging economies: PRC, India, and others

II. Housing Policies for Homeowners

Cash benefits for
housing /
Housing subsidy

Demand/Supply
Merits

Demerits

Country examples

Lowers housing
costs for HH

Mortgage interest
rate reduction

Mortgage interest
deduction from
income tax

Demand
Lowers financial cost Lowers housing
to purchase housing financing costs

Simple to
implement and to
understand for HH
Cash benefits used
for other purposes

Enhances
competition
Crowds out private
banks and investors

Less effective for

low-income groups

Eligibility criteria

Increases HH debt

Increases HH debt

Fiscal burden

Fiscal burden

Fiscal burden

Germany, Rep. of
Korea, Singapore

Japan, Rep. of Korea

US, Japan

Upgrading quality Construction of

standards
housing or
provision of
land
Demand/Supply
Enhances living
standards and
durability
Contributes to
environmental
policies
Implementation
costs for HH and
government
Makes housing less
affordable for lowincome groups

Supply
Accelerates the
construction of
houses

Japan, Rep. of
Korea

Japan, Rep. of
Korea, Singapore

Ensures quality of
houses
Overstretched
supply capacity
Lack of diversity
Fiscal burden

14

II. Housing Policies for Rental Market

Rent certificate

Demand/Supply
Merits

Demerits

Housing voucher

Demand
Increases housing
consumption

Gives HH more
choices

Incentivizes
maintance (owner)

Incentivizes
maintance (owner)

No incentive to find Subsidy might be

inexpensive
used for other
housing
purposes
Fiscal burden

Country examples US

Rent control

Public housing

Demand/Supply
Mitigates the
burden of rent hikes

Subsidy to
suppliers

Supply
Addresses
housing shortage

Accelerates the
construction of
houses

Guarantee
minimum
standard

Addresses housing
shortage

Excess demand

Limits HH choice

Overinvestment

Low incentive for

new construction

Crowds out
private suppliers

Fiscal burden

Inefficient
allocation

Eligibility

Fiscal burden

Germany, Rep. of
Korea, US

US, Switzerland

Fiscal burden
Japan, UK

Germany, India

15

II. Housing Policies: Cost-Effectiveness Analysis

Owner Occupied Housing Market:
Policy
Cash subsidy for buyers
Owner
occupied
house

Housing subsidy

Policy
variable

Policy Cost

Utility

Utility
(%)

0.021

0.00465

0.07354%

G1

From
0

To
0.021

Subsidy rate

0%

0.238%

0.021

0.00464

0.07350%

5%

4.462%

0.021

0.00500

0.07921%

rtyL*

0.021

0.021

0.00465

0.07360%

Policy Cost

Utility

Utility
(%)

Mortgage interest rate

reduction
Mortgage interest deduction
from income tax

Change

Rental Housing Market:

Policy
Cash subsidy for tenants

Change

Policy
variable

From

To

G1 and G2

0.518

1.00973

0.21612

3.34299%

Subsidy rate

0%

10%

1.00973

0.20545

3.17805%

Rental house
Rent aid

16

17

Research Objective
Better understand the link between home ownership and health.
Are homeowners healthier?
Probably YES.
Why? Because they are generally richer and spend more on medical
services.
Are homeowners healthier after controlling for age, sex, income,

educational background, financial assets, housing conditions...?

We find that YES.
But why?
Grossman (1972) model

Data: The Keio Households Panel Survey (KHPS) provided by

Panel Data Research Centre at Keio University.

18

Brief overview of literature

The impact on housing conditions on health
Better housing conditions healthier
Examples: India (Nayar, 1997), Malawi (Wolff et al.,
2001), US (Breysse et al., 2004), UK (Blackman and
Harvey, 2001)
The impact of home ownership on health
Not yet tested quantitatively.
Impact of home ownership on:

Educational achievements of children (Green and White, 1996;

Haurin et al., 2001)
Incentives to invest in local amenities and social capital
(DiPasquale and Glaeser, 1999)
19

The Keio Households Panel Survey

Yearly longitudinal survey of private households in Japan

since 2004
Latest available data: 2012
About 3,500-4,000 sample households each year
Sampling of people between 20 and 69 as of 2004,
representing 2/3 of the population
Questions cover wide range of information, for example:
180 questions about employment, academic history, health,
60 questions about households income and expenditure
70 questions about housing

8 questions about mortgage

20

Variables for Analysis

Demographic information
Age, sex, marital status, family size ,etc.
Socio-economic status
Educational background, employment ,etc.
Households asset
Income, saving, securities, debt, mortgage ,etc.
Housing information
Home ownership
Housing conditions (floor space, yard size, housing age, etc.)
Health variables
Self-assessed health, health check-ups, medical expenditure,
OTC medicine purchase, hospitalization, etc.
21

Renters vs Owners: Self-assessed health

Source: Aizawa & Helble (2015)

22

Renters vs Owners: Health check-ups

Source: Aizawa & Helble (2015)

23

Renters vs Owners: Medical expenditures

Source: Aizawa & Helble (2015)

24

Methodology
3 different dependent variables:
1. Self-assessed health condition (dummy)
2. Health check-ups (dummy)
3. Medical expenditure (in Yen)

Explanatory variables:
Demographic information, socio-economic statuses,

households financial situation, and home ownership

Controlling for housing conditions

25

Methodology
Estimation 1: Do home owners assess themselves as
more healthy compared to renters?
Dependent variable: Self-assessed health condition
3 types of self-assessed health:
1. Self-assessed overall health (sah)
2. Self-assessed physical health (physical)
3. Self-assessed mental health (mental)
Taking account of housing conditions (floor space and
yard size per family member, age of the house,
amenities for the elderly, distance to the station)
RE probit estimation
26

Estimation 1: Self-assessed Health

age
edulevel2
edulevel3
lninc
lnborrow
mortgage
own
urban
lnsaving
lnsecurities
N

(1)
Sah
Taking account
of housing
conditions
-0.0549***
(0.00596)
1.206***
(0.279)
1.373***
(0.285)
-0.0156
(0.0522)
-0.0132
(0.0166)
0.00101
(0.140)
0.407**
(0.165)
-0.376**
(0.177)
0.0580***
(0.0181)
0.0280
(0.0194)
11520

(2)
Physical health
Taking account
of housing
conditions
0.00132
(0.00288)
0.189*
(0.111)
0.283**
(0.117)
0.0485*
(0.0295)
-0.0233***
(0.00867)
-0.00307
(0.0727)
0.149*
(0.0811)
-0.0543
(0.0834)
0.0234***
(0.00904)
0.0101
(0.00970)
16098

(3)
Mental health
Taking account
of housing
conditions
-0.00212
(0.00275)
0.0893
(0.106)
0.0808
(0.112)
0.0891***
(0.0291)
-0.0242***
(0.00853)
0.0694
(0.0710)
0.0424
(0.0791)
-0.0804
(0.0803)
0.0389***
(0.00877)
0.0109
(0.00938)
16189

Note: Only selected

variables listed

27

Results
Estimation 1 (Self-assessed health):
General Self-assessed health (sah)
Homeowners think of themselves as healthy (p<0.05)
Income and securities insignificant
Saving significant (p<0.01)
Better educational background better health (p<0.01)
Urban dummy shows significance (p<0.01)
Physical and mental health (mental, physical)
Ownership significant for physical health (p<0.10)
Ownership not significant for mental health
28

Methodology
Estimation 2: Do homeowners receive health check-ups

more often?
Dependent variable: Undergoing health check-ups
3 types of health check-ups:

Complete screenings (fullscreen)

2. Cancer screenings (cancerscreen)
3. Periodic screenings (companyscreen)
RE probit estimation
Compulsory screenings (Periodic screening) vs Voluntary
screenings (Complete and Cancer screening)
Control for the financial support system by large companies
1.

29

Estimation 2: Health Check-ups

(1)
Complete screening
age
0.0308***
(0.00419)
fulltimeworker
0.203**
(0.0881)
parttimeworker
-0.00887
(0.102)
largecompany
0.526***
(0.0742)
edulevel2
0.432***
(0.166)
edulevel3
0.906***
(0.174)
lninc
0.445***
(0.0547)
lnborrow
-0.00524
(0.0129)
mortgage
0.145
(0.0990)
own
0.292***
(0.111)
lnsaving
0.0478***
(0.0136)
lnsecurities
0.0304**
(0.0122)
N
19556
Note: Only selected variables listed

(2)
Cancer screening
0.0308***
(0.00262)
-0.320***
(0.0526)
-0.201***
(0.0556)
-0.00684
(0.0557)
0.0794
(0.0884)
0.333***
(0.0951)
0.0611**
(0.0291)
0.0126
(0.00870)
-0.125*
(0.0669)
0.0993
(0.0665)
0.0466***
(0.00883)
0.00201
(0.00847)
19556

(3)
Periodic screening
0.00324
(0.00232)
0.840***
(0.0506)
0.320***
(0.0558)
0.481***
(0.0476)
0.190**
(0.0904)
0.0853
(0.0960)
0.138***
(0.0257)
0.00448
(0.00743)
-0.0280
(0.0593)
0.0804
(0.0608)
0.0373***
(0.00765)
-0.0110
(0.00824)
19556

30

Results
Estimation 2 (Health check-ups)
Significant for the complete screening (p<0.01).
Insignificant for the periodic screening.
Homeowners are more willing to undergo voluntary
check-ups.
Positive significance of the company size dummy for the
complete screening and the periodic screening (p<0.01)
Income and education levels matter.

31

Methodology
Estimation 3: Do homeowners spend more on health care?
Dependent variable: ln(medical expenditure)
,
= 0 + 1,
1 +
= +
Pooled OLS, FE, RE
Possible selection bias due to the different decision making
between healthy and unhealthy people
Two equation model Heckman (1979)
Possible endogeneity of home ownership (Aaronson, 2000)
HT, IV(prtlive, yard, lnroomratio)
Test the endogeneity of home ownership by the HansenSargan J test and the GMM distance test
32

Estimation 3: Do home owners spend more on health?

age
agesq
lninc
lnborrow
mortgage
own
urban
lnsaving
lnsecurities
N

(1)

(2)

(3)

(4)

(5)

(6)

Pool

FE

RE

Heckman

HT

IV

-0.0291***

-0.0370***

-0.0277***

-0.0210**

-0.0350***

-0.0466***

(0.00618)

(0.0127)

(0.00571)

(0.00919)

(0.00834)

(0.0147)

0.000374***

0.000271**

0.000347***

0.000286***

0.000409***

0.000357**

(0.0000650)

(0.000124)

(0.0000595)

(0.0000964)

(0.0000847)

(0.000142)

0.144***

0.0468***

0.106***

0.136***

0.0840***

0.0383*

(0.0156)

(0.0163)

(0.0118)

(0.0228)

(0.0133)

(0.0200)

-0.00312

-0.00751*

-0.00430

-0.00362

-0.00511

-0.00844*

(0.00356)

(0.00414)

(0.00326)

(0.00526)

(0.00337)

(0.00476)

-0.0754***

-0.0466

-0.0744***

-0.0896**

-0.0535*

-0.0756

(0.0268)

(0.0369)

(0.0250)

(0.0392)

(0.0285)

(0.0481)

0.197***

0.159***

0.200***

0.157***

0.165***

0.268**

(0.0273)

(0.0507)

(0.0246)

(0.0391)

(0.0465)

(0.127)

-0.00257

0.0989*

-0.00245

0.0271

-0.00303

0.1000

(0.0268)

(0.0566)

(0.0253)

(0.0416)

(0.0301)

(0.0658)

-0.0119***

0.000883

-0.00777**

-0.0210***

-0.00449

0.000362

(0.00352)

(0.00493)

(0.00325)

(0.00525)

(0.00354)

(0.00564)

0.00662*

0.00290

0.00600*

0.00586

0.00634*

0.00324

(0.00400)

(0.00526)

(0.00342)

(0.00549)

(0.00376)

(0.00614)

20503

20503

20503

11349

20503

15518

Note: Only selected variables listed

33

Results
Estimation 3: Medical Expenditure
Homeowners spend more on health (p<0.05)
FE model preferred by the Hausman test (p<0.01)
Reject the independence of the decision to spend and
the amount spent between healthy and unhealthy
people (p<0.01)
Fail to reject the exogeneity of home ownership (p<0.01),
(The Hansen-Sagan J test and the GMM distance test)
Income is significant at a 1% level (model 1-4)

34

Conclusion
Limitations:
Self-assessed health = True health ?
Selection bias
Main finding: Homeowners
feel healthier.
more willing to undergo health check-ups.
spend more on health care.

35

IV. Possible future joint projects

Research:
Urban health and housing (empirical study)
Housing policies and health systems
...
Capacity Building:
Health insurance (central-local governance)
...

37

References
Aaronson,A. (2000) A Note on the Benefits of Homeownership, Journal of Urban
Economics, 47, pp.356-369
Blackman,T. and Harvey,J. (2001) Housing Renewal and Mental Health; A Case
Study,Journal of Mental Health, 10(5), pp.571-583
Breysse,P., Farr,N., Galke,W., Lanphear,B., Morley,R., Bergofsky,L. (2004) The
Relationship between Housing and Health; Children at Risk Environmental Health
Perspectives, 112(15), pp.1583-1588
DiPasquale,D. and Glaeser,L. (1999) Incentives and Social Capital: Are Homeowners
Better Citizens? Journal of Urban Economics, 45, pp.354-384
Green,R.K., White,M.J.(1996) Measuring the Benefits of Homeowning: Effects on
Children, Journal of urban economics, 41, pp.441-461
Grossman,M.(1972) On the Concept of Health Capital and the Demand for Heatlh,
Journal of Political Economy,80, pp.223-255
Grossman,M.(1999) The Human Capital Model of the Demand for Health, NBER
Working paper 7078
Grossman,M.(2005) Education and Nonmarket Outcomes, NBER Working paper 11582
Grossman,M.(2008) The Relationship Between Health and Schooling, Eastern
Economic Journal, 34, pp.281-292

39

References
Haurin,D.R., Parcel,T.L., Haurin,R.J. (2001) The impact of Homeownership on Child
Outcomes, Low-income Homeownership Working Paper Series, LIHO-01.14. Joint
Center for Housing Studies of Harvard University
Hausman,J.A., Taylor,W.E.(1981) Panel Data and Unobservable individual Effects,
Econometrica, 49(6), pp.1377-1398
Jason, M. F. and David E. F. (2009) Higher Education and Health Investments: Does
More Schooling Affect Preventive Health Care Use?,Journal of Human Capital, Vol. 3,
No. 2 , pp. 144-176
Lindeboom,M. and van Doorslaer,E. (2004) Cut-point shift and index shift in selfreported health, Journal of Health Economics, 23, pp.1083-1099
Nayar,K.R.(1997) Housing Amenities and Health Improvement; Some Findings
Economic and political Weekly,32(22), pp.1275-1279
Nicoletti,C. and Peracchi,F.(2005)A Cross-country Comparison of Survey
Nonparticipation in the ECHP, Journal of the Royal Statistical Society Series A, 168,
pp.361-381
Wolff,C.W, Schroender,D.G., Young,M.W.(2001) Effect of Improved Housing on Illness
in Children under 5 years old in Northern Malawi: Cross Sectional Study, British Medical
Journal, 322, pp.1209-1212

40

Self-assessed health

41

Floor area per housing unit

Source: A Quick Look at Housing in Japan, May 2014, The Building Center for Japan,
p17
42

The home ownership rate

Source: A Quick Look at Housing in Japan, May 2014, The Building Center for Japan, p17
43