Effect of Changes in Living Conditions on Well-Being: A Prospective Top–Down Bottom–Up Model

Abstract

Using the German Socio-Economic Panel, we examined life-satisfaction and housing satisfaction before and after moving (N = 3,658 participants from 2,162 households) with univariate and bivariate two-intercept two-slope latent growth models. The main findings were (a) a strong and persistent increase in average levels of housing satisfaction, (b) no increase in average life-satisfaction, (c) low stability in individuals’ level of housing satisfaction, and (d) high stability in individuals’ level of life-satisfaction. The results are discussed in the context of top–down and bottom–up models as well as adaptation theories of well-being. We conclude that moving or living in a better home is unrelated to life-satisfaction judgments for two reasons. First, housing makes a small contribution to life-satisfaction judgments. Second, positive effects of better housing are undermined by the greater costs of living in a better home. The results provide no support for the prediction of adaptation theory that shifting aspirations undermine the benefits of living in a better home.