Does homeownership improve physical health? Evidence from a quasi-experiment in Hong Kong

A growing body of evidence suggests a causal link between homeownership and various social and mental health benefits, but the evidence for causation in the relationship between housing tenure and physical health is often weak. Drawing on the theoretical literature framing housing as a social determinant of health, this study investigates the causal impacts of homeownership on physical health outcomes in Hong Kong. Using data from four waves of the Hong Kong Panel Study of Social Dynamics (HKPSSD), we exploit a quasi-experiment in Hong Kong introduced by the Home Ownership Scheme, a government program offering subsidized homeownership opportunities via a random lottery. Initially, OLS and probit regression results suggest homeownership has a significant positive association with self-perceived physical health and a significant negative association with hospitalization rates for adults between 18 and 64. However, using the homeownership lottery results as an instrumental variable (IV), we specify a series of two-stage least squares (2SLS) regression models to determine the robustness of these results. The associations lose significance in the IV estimations, indicating no causal relationship exists. This study contributes to the nascent literature linking homeownership to physical health and provides rare evidence from a non-Western society.