For decades, owning a home has been seen as a hallmark of the ‘American dream’ and a major life milestone. While we take it for granted that home ownership is good, we make the argument in today’s episode that, from the perspective of subjective well-being, owning a home isn’t necessarily the key to happiness. This conversation covers the non-financial aspects of homeownership and why owning a home isn’t necessarily superior to renting one. This is supported by data from a number of different studies that describe the relationship between experienced happiness and life evaluation, and how the decision to buy or rent relates to effective forecasting, for example. Benjamin unpacks concepts like focalism, hedonic adaptation, and buyer's remorse, as well as social comparison and happiness when it comes to material purchases like homes. He concludes with the following words of wisdom: buying a house will not make you happy, but that doesn’t mean it’s a bad decision. During the course of today’s episode, we also touch on Shane Parrish’s The Great Mental Models Volume 3: Systems and Mathematics, how individuals engage in panic selling according to the recent MIT study, ‘When Do Investors Freak Out?’, and some of the listener discussion points that arose from our in-depth conversation with John Cochrane in Episode 169. Tune in today for all this, plus so much more!

Key Points From This Episode:

• Find out why you should listen to Tim Ferriss’ interview with Micheal Dell. [0:07:06]

• Today’s recommended book: The Great Mental Models Volume 3 by Shane Parrish. [0:08:05]

• Unpacking how individuals engage in panic selling according to the MIT study, ‘When Do Investors Freak Out?’ [0:11:10]

• We weigh in on three top Canadian banks halting sales of third-party mutual funds in preparation for Know Your Product (KYP) rule reform. [0:13:53]

• Ben highlights some listener discussion points following the John Cochrane episode. [0:16:34]

• Learn how predictable returns result from unpredictable cashflows in the long run. [0:18:23]

• What this means for long-term investors: focus on cashflow payoffs, not returns. [0:18:59]

• Why stocks are less risky for long-term investors if returns are predictable, which introduces horizon effects and impacts portfolio theory. [0:20:49]

• Key takeaways: outside income streams as additional asset classes, value versus growth, pure wealth investors versus labor market investors. [0:21:42]

• Introducing Ben’s topic for this week: does owning a home make you happy? [0:28:15]

• Some perceptions about the correlation between homeownership and happiness. [0:29:53]

• Why the non-financial aspects of renting might make it superior to home ownership. [0:31:50]

• Expanding on the 2011 paper, ‘The American Dream or the American Delusion?’ [0:32:10]

• Conclusions from the 2019 paper, ‘Homeownership and Happiness’, that Swiss homeowners are no happier or even less happy than renters. [0:33:57]

• The relationship between ownership and slightly elevated reflective life satisfaction; the difference between experienced happiness and life evaluation. [0:34:15]

• Ben reflects on how the decision to buy or rent relates to affective forecasting. [0:35:02]

• Focalism: how experience is shaped by how we spend our time rather than more stable circumstances like paying for housing. [0:37:50]

• How to deal with poor affective forecasting, hedonic adaptation, and buyer's remorse by making smaller, more frequent experiential purchases. [0:41:26]

• What Elizabeth Dunn and Michael Norton have to say about homeownership in Happy Money. [0:43:14]

• Social comparison and happiness when it comes to material purchases like homes. [0:43:57]

• How housing impacts life satisfaction: quality, economic effects, prestige, freedom. [0:46:09]

• Ben on how working from home can exacerbate possible issues for homeowners. [0:51:28]

• Concluding this topic: why homeowners are not automatically happier than renters. [0:52:05]

• Personally, Ben shares why he would rather own more of his time than his home. [0:53:27]

• Suggested reading, including Positive Psychology and The Happiness Hypothesis. [0:54:35]

• Talking Sense: whether success is based on money, cost versus value, and more! [0:57:38]

Read The Transcript:

Ben Felix: This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision-making from two Canadians. We are hosted by me, Benjamin Felix and Cameron Passmore, portfolio managers at PWL Capital.

Cameron Passmore: So welcome to episode 170, and yes, Ben did do a new intro. We were finally convinced to change the intro. We've had a lot of people comment that this really applies to people around the world and not just to Canadians. So you had a pretty compelling argument from a listener that I think finally tipped our vote in favor of making this change.

Ben Felix: Well, it was there. So they gave us a suggestion, I think for what I just said that it's from two Canadians. I thought, you know what? That's not so bad.

Cameron Passmore: It's pretty compelling.

Ben Felix: My argument had always been that it is for Canadians because that's primarily our audience. I pulled the stats on that. It's still 41% of downloads come from Canada. That's on our podcast platform. And then our expertise is Canadian and we're in Canada. So it is for Canadians, but changing it to, from a couple of Canadians. Hey, you know what? I think that still captures a lot of it. And the point that people always made was that if we say that it's for Canadians, then someone who listening who's not Canadian might feel like, "Oh, well, this is not for me. I shouldn't listen to it."

So it's probably like, I don't know, six or eight times we've gotten that feedback over the last couple of years that I started listening, but only by chance because I was deterred initially by the introduction and I'm worried my friends are going to have the same experience. So anyway, we changed it.

Cameron Passmore: We did. And that's good. Speaking of downloads and listeners, we just recently surpassed our 2,000,000th audio download. Pretty nice. And we're averaging about 30,000 audio downloads per week. YouTube now is almost 10,000 per week. So I would think in the reasonably near term future, we should be hitting a couple hundred thousand total downloads per month, which is still unbelievable to me given our objectives when we started this just over three years ago.

Ben Felix: Yeah.

Cameron Passmore: It's all pretty crazy. And on top of that, we were ranked number one in Canada on the Apple ranking system in both the investing and business categories. It was brief. I did not capture a screenshot.

Ben Felix: Well, not that brief. It was a few days. It was a few days and we stayed pretty high up on the charts for probably a week. I think it's from new downloads or something like that because the coincidence with that was a Reddit post that blew up of what podcasts do you listen to for learning about investing? And ours was that someone suggested Rational Reminder and we are the top comment, and that post kind of blew up.

So I don't know exactly what the metrics are, but I think it's something to do with new downloads or new users downloading or something like that. Or total downloads. I don't know. But total downloads are pretty consistent.

Cameron Passmore: One of those mysteries we may never know the answer to.

Ben Felix: Yeah.

Cameron Passmore: So it's a very kind recent reviews. First one is, "It's Brandon D. I'm a new Canadian investor, freelance. I just incorporated my agency and never had a ton of money. But building some wealth now in this fast paced world, it's real easy to be swept up in hype and expectations. This podcast takes some usually boring topics and lays it out in a really great way for those younger people taking a deeper dive. I may not understand all of it, but I found myself coming across things in my journey. Having this podcast as a reference. Big cheers." So very kind.

Cameron Passmore: "10:36 PM I came across your YouTube channel and wondered why Ben didn't have more content." And then he found this podcast. So he thanks this podcast. "Coming full circle as an index investor several years ago. Started as an index investor and doing just fine. Then last year I got greedy and try to pick penny stocks and lost a ton of money. If I had this podcast, I never would've made those mistakes. But then again, without those mistakes, I might not have gone looking for better advice." He also appreciates the great audio production.

And last one is not so terrible. It says, "One of the best informational podcasts out there. You learn something new and interesting, and not even strictly related to finance in every episode. Thanks for what you do." It's very kind reviews.

Next week, Professor Campbell Harvey is our special guest and it's worth the length. You'll see it's a long one, but it's worth it. We had such a great conversation with Cam.

Ben Felix: You broke your streak of not mentioning the length of podcast episodes.

Cameron Passmore: I just said it was worth the length. I didn't question the length. In two weeks, Rob Carrick is going to join us. So he's a Canadian writer for The Globe and Mail. So he's going to be joining us to talk about the issue of what's happening in the banking world with restriction to third party funds. He's written about this in The Globe, so that'll be good. And three weeks, so the week after Rob, Antonio Picca will join us who's the head of factor investing at Vanguard. Then in five weeks, Robin Raub who's the author of the Wisest Investment, which by the way, is a great book. I finished it last week.

Cameron Passmore: So if you want to have a great book as a resource for raising children and the issue of money and family, it's worth it to read that book before we interview her and that's coming up in five weeks. You can always connect with us on Instagram.

We have our Rational Reminder feed on Instagram. I'm on Peloton at CP313, if you want to hang out there. We're both on Twitter. Had a nice call from an advisor last week who was very complimentary of the podcast. Just talked about how genuine he found us to be. He says, "It seems like you guys really get along," which I think is a fairly accurate statement.

Ben Felix: It's true. We do.

Cameron Passmore: It's true. We do, right? Anyways, it was really nice to talk to Braden last week. And in the store, we're getting a whole new shipment of hoodies in this week. I know we're out of some sizes for those who have been trying to order some of the popular sizes. They should be all back in stock this week. And we have lots of talking sense cards still we can ship off to you. Anything else, Ben to add?

Ben Felix: They've been pretty popular, the talking sense cards in the store?

Cameron Passmore: Yup. We're through like two cases. We're almost up to 400 total orders in the store, which the store has been open less than a year. There's a couple of orders every day. It's not Kardashian, but hey, it's good for us. In many ways, it is not Kardashian.

Ben Felix: All right. With that, let's go ahead to the episode.

Cameron Passmore: I thought we'd say Kardashian in this podcast.

Ben Felix: Welcome to episode 170 of the Rational Reminder Podcast.

Cameron Passmore: So before I get to my book review, did you check out the interview last week that Tim Ferriss had with Michael Dell by chance?

Ben Felix: I have not listened to it yet. You did tell me to listen to it though.

Cameron Passmore: It just showed up in the feed. I never heard an interview with Michael Dell at all, and he's just come out with a book called Play Nice But Win. It was an excellent interview. A much nicer guy than I imagine. I guess I had this illusion that he wasn't, but he's really nice, really decent. He tells the story of Dell and how the company was founded, how it grew, it went public, how and why they took it back private. Then they went public again when they acquired VMware and EMC.

He talked about how to get this massive level of scale just to survive. And the numbers, the sales numbers are completely insane. So that's a really good, interesting interview. Now I see, since he has a new book coming out, he's on a bunch of different podcasts, but Tim Ferriss' interview is well worth listening to.

But my main book I wanted to highlight this week is Shane Parrish just came out with his third edition in the Mental Model series. And I know we've talked about one of the other editions before, but the third one of the series came out last week called Systems and Mathematics. Off the top, I mean, the books are beautiful. They're hefty, they're beautifully designed, beautiful color, interesting layout. Even just how he intersperses stories of history and with the arguments he's making, it's an excellent, beautiful piece.

So Shane's based here in Ottawa and hosts a very successful podcast and knowledge project, which I know we've mentioned it very often here on our podcast. He was our guest back in episode 19 when you went over to interview Shane at his office.

Ben Felix: That's crazy. That was episode 19.

Cameron Passmore: Completely crazy. I mean, it was so awesome that he was willing to join us, and he's been a good friend of ours ever since. So Shane's basic mission is to help people acquire knowledge, to help them make better decisions. And in his podcast, he interviews all kinds of interesting people to help us learn some of their best practices. And he's had many fantastic guests. So this third volume is about how systems and math govern so much of our day to day lives.

So just some quick examples, he does this great description of feedback loops in social systems and how much feedback we give and receive impacts how people operate, that he links that to incentives and how incentives can often drive behavior.

Another section he talks about, bottlenecks and he says how bottlenecks are the slow parts of systems obviously. And every system has one. He has advice on how you can anticipate where the bottlenecks will be, what you can do about them. Then we talked about nudge a couple weeks ago how bottlenecks can nudge you towards better ideas. He talks about scale and how complex systems often grow in non-linear fashion and bottlenecks show up in different areas at different points in time.

Scale can mean more connections and more moving parts, which can lead to more bottlenecks and managing it. Scale is different than when your business or your life was simpler and smaller. He talks about how processes change. What's the optimal size? It is so fascinating. Then he gets into algorithms, which is a term that we've all heard so many times and how an algorithm is basically a bunch of steps.

It can be used to make calculations effectively. A bunch of if then statements. So he weaves this all together in a resource that I'm not sure you'd sit down or read the whole thing at once, but it's just such a great book to pick up. And all of these individual subjects are all well written. They're all standalone and it's a phenomenal third volume to this series.

Ben Felix: No surprise. It's great.

Cameron Passmore: No. He does a great job. Other content I came across one is a study from MIT called When Do Investors Freak Out?: Machine Learning Predictions of Panic Selling. So despite standard investment device of the contrary, individuals do often engage in panic selling, and they do so by liquidating significant portions of their risky assets in response to large losses. So this MIT study was using a data set of over 650,000 individual brokerage accounts belonging to almost 300,000 households for the years, 2003 to 2015.

So what they did is they document mentioned the frequency, timing, and duration of what they call panic sales, which they define as a decline of 90% of a household's account equity assets over the course of one month of which 50% of that drop is due to trades.

Ben Felix: That piece is crazy.

Cameron Passmore: That alone is crazy. I went back to try to get clarity on that. I read every article I could find, and they all refer to the same statement. 90% of the equity value over the course of a month. These are people that trade out after that event. So they found that a disproportionate number of households make panic sales when there are sharp market downturns, a phenomenon, they call freaking out. They find the panic selling and freak outs are predictable and fundamentally different than other well known behavior patterns such as over trading or the disposition effect.

But the profile of the people are interesting. Investors who are male or above the age of 45 or married, or have more dependence or who self identifies having excellent investment experience or knowledge tend to freak out with greater frequency. And all the panic sales protect the investors during the crisis. I don't know how well protected you are after 90% draw down. Such investors often wait too long to reinvest causing them to miss out on significant profits when markets rebound.

Ben Felix: I wonder if that 90% figure is market adjusted. I don't know. T.

Cameron Passmore: Hey found that panic sales are infrequent with only 0.1% of the investors panic selling at any point in time. They occurred up to three times the baseline frequency when there are large market movements. Second they found is almost 31% of the investors who panic sell never return to reinvest in risky assets.

Ben Felix: Wow.

Cameron Passmore: However, those that do, more than 58% reenter the market within half a year.

Ben Felix: It's a big chunk of people who end up not investing in risky assets again.

Cameron Passmore: I guess losing 90% will do that. In other news, it seems that the regulators are not pleased with three of the big Canadian banks that recently announce their intention to disable their financial planning divisions from selling third party mutual funds. As I mentioned off the top, this will be a topic for when Rob Carrick is on in a couple of weeks. So lots of chatter lately in the media, in Canada about the banks.

Ben Felix: Do you think listeners know what happens? Should we talk about it?

Cameron Passmore: Let's give a brief background here. So three of the big banks in Canada have plans to disallow any third party funds to be sold by their financial planning arms. This does not apply to full service brokerage nor the DIY clients on their brokerage platform. These are, as I understand it, financial planning clients inside the bank branch. So this all started with know your product rules that are taken effect at the end of 2021, with the intent of these rules for advisors to have greater product knowledge.

However, three banks decided to cut access to third party funds to ensure greater product knowledge, thus allowing their advisors to only recommend in-house product, which arguably is a clear conflict of interest, but the chair of the Canadian Securities Administrators has stated that this and I quote, "This is not what the reforms are meant to do."

In reading the article last week, it sounds like the Canadian Securities Administrators are looking into the matter. I've heard myself from a couple of bank advisors who are not happy. They weren't happy with the bank environment before, but now they're really not happy.

Ben Felix: I bet. So we still see how this plays out, but it's a pretty hot topic right now between the banks and the regulators. You can see how the regulation would create the incentive though for the banks to say, "Well, listen, we know our products really well. We don't want to take on the additional risk of doing due diligence on third party products." I'm not saying what they're suggesting is the right-

Cameron Passmore: But they're doing in the brokerage area already. That's one of the points of the article like you're doing the brokerage. Why not just roll it over to your financial planning side?

Ben Felix: Yeah.

Cameron Passmore: They have mutual fund analyst teams.

Ben Felix: Yeah. So we've been looking into this recently. You're right. They do have analyst teams, but we've been familiarizing ourself with the KYP rules too. And as I understand it, for advisors who recognizes more competent, like a portfolio manager, for example, the firm's KYP responsibility is not as strict. So for somebody with just a mutual funds license, they may be more exposed from a regulatory perspective. That could be it.

Cameron Passmore: Interesting.

Ben Felix: Could be part it anyway. Messy though. No matter how you slice it, it's messy.

Cameron Passmore: Rob is going to have good insight because he gets a lot of the feedback from people in the industry as well as the end clients. So you want to highlight a listener question.

Ben Felix: Well, it was more the listener discussion following our episode with John Cochrane. I've heard from a lot of people within our PWL team and within the Rational Reminder community that this was a multi-pass episode like people had to listen to it multiple times to grasp the material, which I totally get. It was pretty heavy episode. The discussion in the Rational Reminder community, when I checked last night, it had 146 comment in there in the discussion, which is more than typical for an episode.

So lots of really good discussion going on in there. Lots of people chiming into that discussion as well kind of saying that this is over my head. So rather than let that sit there, I thought I would talk a little bit about what my main takeaways were from reading John's research and then also from the conversation that we had with him. And I'm only going to touch on the traditional finance stuff because we got a little bit into cryptocurrency. We got a little bit into the fiscal theory of the price level.

You can go listen to the episode if you want to hear about that stuff. But on the asset pricing side, I'll try and summarize my main takeaways from his work. So the big themes, and it's really interesting actually reading his stuff because he's got lots of papers going back many years and you start to see how they all tie together. That was kind of one of the light bulbs that went off for me as I read it all. It's like, oh, he wrote this paper because he found this to be true in this other paper and it all eventually becomes this big cohesive thing.

I think actually his most recent paper, Portfolios For Long-Term Investors does tie all of it together quite nicely. But it's still interesting going back, and I guess seeing the original thinking from the source. So the themes are that price changes, relative price changes. So price to dividend ratio changes are due to discount rates, which means that returns are predictable in the long run.

Even that's a mouthful to think through. Prices are aren't changing is what he's found empirically. Prices aren't changing due to predictable cash flows. So if prices are high, it doesn't mean that dividends are going to be high in the future. It means returns are going to be low in the future. So that's predictable returns, unpredictable cash flows.

Now for long term investors, one of the important things we can take away from that is that we should care more about cashflow payoffs than returns because returns are pretty volatile. They bounce around a lot as discount. Rates change, but cash flows don't. They're a lot more stable now. That's pretty hard to think through. So what John said in his most recent paper is that if we take the general equilibrium view, it's a lot easier to think through how this should actually inform portfolio construction.

So if you think about the cash flows, the companies are actually producing and then think about general equilibrium, , which is the idea that the average investor must hold the market, then you can think through how you are different from the market and how your outside income streams, which are things like your job, maybe your housing, maybe the characteristics of the cash flows of a business that you own.

You can think through how those cash flows match up with the cash flows in your portfolio and figure out from there how you're different from the market. Now, if price variation is due to discount rate changes and not cashflow expectation changes, the result is return predictability and cashflow unpredictability like I just mentioned a moment ago. In simple terms, when prices get higher, we have to expect returns to be lower, but we can't expect anything about cash flows.

That's one of the key points. The statistical tests behind that, that John has used in his papers to prove that that's true empirically are probably more involved than I should try and describe in an audio format. But in simple terms, what he's found is that empirically high prices have historically been resolved by lower future returns, not higher future dividends.

So that's again, return predictability, cash flow unpredictability. If returns are predictable, stocks aren't as risky for a long term investor because all that price volatility doesn't mean much for the cash flows. Cash flows are what matter in the long run. Now, this also introduces horizon effects, which means stocks are less risky for long term investors than they are for short term investors.

And that changes things with portfolio theory. So traditionally mean variance optimization that takes the single period return in standard deviation and asset correlations, and lets you build an optimal portfolio. That changes if you introduce horizon effects. You can't say something as single period mean variance optimal if returns are predictable mean variance optimization over more than a single period would assume that returns are IID, independent and identically distributed.

But what John Cochrane showed with his research is that they're not. They're predictable. One of the takeaways I think is that you can think about your outside income stream as another asset class, and you don't want your outside income to be sensitive to the same economic risks as the assets that you own in your portfolio.

So if your outside income, if your employment income is sensitive to the same economic risks as growth stocks, you probably want to own value stocks in your portfolio. But the opposite is also true. And that's another one of the important takeaways that for me personally in communicating asset allocation, like why should somebody tilt toward value? You can't just say it's because value's a good thing to buy because if that's true for everybody, then why is there a premium?

So I think for us telling people, you should tilt toward value, we need to be able to answer their question, "Well, who should tilt toward growth?" And it's somebody who's outside income makes growth a good diversifying asset for their overall portfolio of cashflow streams. Then the other interesting thing about that is that as the size of your outside income decreases relative to your portfolio, your outside income has decreasing importance.

So one of the other terms that John introduces in his most recent paper is the idea of a pure wealth investor. So somebody that has no outside income streams. In that case, they might start to look more like a traditional mean variance investor, where you can say things like, "Oh, you should tilt to value because you want to have that risk premium." If you've got no other outside income to worry about, that can actually make sense.

But giving the advice that value is a good thing to buy kind of assumes that everybody is a pure wealth investor, but it also raises the question of why would there be a premium? So this idea of investor heterogeneity is one of the things that is important here. It's like everybody is different. Everybody is exposed to different outside income risks. So in the case of the pure wealth investor, and we're telling them to tilt toward value and they say, "Well, who are you telling to buy growth?"

Well, it's all the people that aren't pure wealth investors that have the outside income risk to hedge. But one of the important takeaways though is that the blanket advice that you should buy value stocks, it's questionable.

I think we have to at least be able to explain in what cases that wouldn't be true, otherwise there's no basis for a value premium. And again, this takes us back to the idea of general equilibrium where instead of trying to build the mean variance optimal portfolio, you can start from thinking about how you're different from average and built a portfolio on that basis.

Practically, I think this is probably pretty tricky to do. What are you actually changing in a portfolio? Do you take out your industry? And John talked with us on the podcast too like it's not clear. There's no equation. There's no math. Do you cut out your industry? Do you cut out value stocks if your human capital is exposed to a value industry? Probably not, but maybe. It's all very messy.

We tried to talk to John about this in the podcast episode too and I don't, I don't think he had a great answer. He made some joke about being really good opposing questions, but not necessarily having the practical answers. Another one of the interesting takeaways on that pure wealth investor is that they're not exposed to the economic risks that somebody in the labor market would be exposed to. And that's what allows them to bear that risk of value stocks.

I mentioned industry portfolio is one of the interesting ideas that comes out of the general equilibrium concept is that if you do take out your industry portfolio, instead of taking out value stocks, industries are not priced risks. So theoretically you can hedge your outside income risk by taking out your industry portfolio without affecting your expected returns. That's kind of interesting. How closely does your human capital correlate with the portfolio with the industry index, for the industry that you work in?

Again, I don't know how clear that is. My biggest takeaways were that predictability and returns, which has to be true with cash flow unpredictability. And that's an interesting one too. So he says that if neither cash flows or returns are predictable, the price dividend ratio is constant.

Now, I kind of took that and said, "I think that makes sense." I didn't think too much more about it. Somebody in the Rational Reminder community started scrutinizing that. Why is that true? And then somebody else jumped in, who's clearly got a PhD in something and went through the appendix where he derived the constant price dividend ratio and explained all of the equations in plain language. And I was frankly blown away.

So there's this proof that John talked about this in the episode too, that if one of the two cash flows or returns have to be predictable and because cash flows are not predictable over returns, therefore must be. So that's a big takeaway. And it matters for long-term investors pretty significantly. Actually preparing for the interview, John ended up influencing the way that we ultimately decided to model expected returns for our upcoming paper that we're just waiting for some final data licenses to release, but our expected return assumptions are going to include some predictability, which was not obvious for quite a while.

The other big takeaway is that have to be able to explain who's selling value if you're telling someone to buy it. Or if you are buying value, if you're tilting toward value, you've got to understand who's selling it to you. That's like investing 101, but the way that John described it, it was different. It was a different perspective. So all that was great, like, okay, we learned something. We learned about predictability. Awesome.

But again, in the discussion in the community, somebody of course posted papers showing that there is return predictability in the US and in the UK, but in Sweden and Denmark, cash flows are predictable and returns are unpredictable. So might be back to knowing less than we thought, but at least we got to feel smart for a little bit. I don't know if I made that any clear or not by trying to explain it.

Cameron Passmore: Well, that was pretty clear. That was good.

Ben Felix: I think all the people in the Rational Reminder community that have PhDs that took two passes to listen to it. I don't know. Hopefully that helped a little bit.

Cameron Passmore: For sure. Okay. So your topic this week, does owning a home make you happy?

Ben Felix: Yep.

Cameron Passmore: This should be a popular topic for the community.

Ben Felix: We'll see. I was having a conversation with somebody about financial planning for their situation, and one of the things that came up was the idea of buying a second property like a vacation property. I kind of talked through basic stuff on happiness and the fact that it's the day to day, hour to hour, small things in life that contribute to happiness more so than things like owning property, and that you can end up with some negative implications from owning property.

You might end up spending a chunk of your weekend, driving out to the cottage or maintaining the cottage, all that kind of stuff. All the little details that you don't think about when you're imagining the favorable aspects of making a big purchase like that. So I thought it'd be interesting to cover buying a cottage in detail. But when I started looking into the literature on property ownership I kind of realized that it's probably better just to talk about owning a home, because the rent versus own decision is so much more broad reaching than the, should I buy a cottage decision. So that's how I decided to cover this.

And there's a ton of literature. Honestly, for all the stuff that we've done on housing, I had never looked into the literature on housing as it relates to happiness. And there's a whole bunch of stuff. So going to talk through it. I think lots of people right now are worried that they're never going to own a home. I think people in Canada, I think in other countries it's similar are taught from a young age that there's something special about home ownership, and we see this often that parents are even willing to put themselves at risk financially, but I don't know if they always realize how much risk they're taking, but in any case to help their kids buy into real estate markets.

I mean with prices in Canada, I think we see that more and more. There's this perception people take it as a given that owning a home is good. So what I'm going to argue based on the literature that I've reviewed is that from the perspective of subject of wellbeing, owning a home is not always a good decision.

I know it's not going to be a popular opinion, but I think that's part of the problem though. I think that's part of the problem with this. And I think people are going to want to hear what I was able to dig up in the literature. I also want to preface this by saying as regular listeners know I did buy a house. So I'll talk a little bit about that decision. We did cover it in a previous episode, but that focused more on the financial aspect.

I only touched on the wellbeing piece. So this one focuses purely on the evidence on that, but then I'll talk through my own decision too. Now, again, this is not on the financial implications. We've done a fairly recent podcast episode on that. We've done a YouTube video on that. I'll probably do an updated YouTube video on that soon. But this episode is about the non-financial aspects of owning a home. And this is always the counterargument.

I mean, many people would disagree on the math that I've done on home ownership. I don't know how you really disagree with that. I guess you can disagree with my assumptions on stuff like real estate price appreciation. But when someone does agree with the math where they will still disagree in many cases is that the non-financial aspects make home ownership superior to renting.

It's interesting, right? Because it's how can you tell someone, "Well, no, you can't feel that way." And you can't. You can't tell someone how to feel, but there's a whole bunch of evidence that surveyed how many, many people feel so we can speak to that.

So there's a 2011 paper titled, The American Dream Or The American Delusion. And they used a unique data set with housing consumption, wellbeing measures, and time use patterns to explore the implications of home ownership. The author of that paper finds that controlling for income, housing, quality and health, the homeowners in the sample were not better off than renters by multiple measures of wellbeing. Instead they actually derived more pain from their home and in this sample it was potentially due to time use differences between renters and owners in the sample.

Homeowners tended to spend less time on enjoyable activities, such as active leisure, presumably because they're spending more time on home tasks. And there's another study that I'll touch on that talks more about that.

Cameron Passmore: I'd buy that one for sure. I got a little rule in my head. You have to do something in the house every day, no matter how small it is. Yesterday I changed a couple halogen light bulbs in the basement. It's like you got to keep moving that pile of work forward.

Ben Felix: Oh, yeah. I buy that one too.

Cameron Passmore: Every day.

Ben Felix: I'm not unhappy to be a homeowner because I love where I live, but I, in many ways miss renting.

Cameron Passmore: But you got to respect these points. Right? I think a lot of people end up wrapping up. I don't mind tinkering around the house. I used to like it a lot more, but now I'm becoming like you. I remember you talking about delegating food preparation when you lived in the city. I'm looking for people to do the gardening. I'm just have no interest in gardening anymore. If I can have someone else do it for me to give me more leisure time, I'm willing to pay for that.

Ben Felix: Right. Or you could just rent a condo. Pay the condo fees, see you later.

Cameron Passmore: Yeah. I like my barbecue too much.

Ben Felix: I don't have a barbecue. I need to get one. Maybe then I'll like my house more. There's a 2019 study, a home ownership and happiness evidence for Switzerland. And the authors there find that Swiss homeowners are no happier or depending on how you look at it are even less happy than renters when variables like wealth, income, employment, health and housing quality are controlled for. Another study using a German sample did find a marginal but positive relationship between home ownership and life satisfaction.

Another study using the United States sample finds that there's a slightly elevated reflective life satisfaction for owners. And there's a distinction here so slightly elevated reflective life satisfaction, but that owners experience less intense feelings of happiness than renters, and that owners spend much more time working on their home than renters. So that's a difference between experienced happiness that we've talked about before and life evaluation.

So owners had slightly higher life reflective happiness, but less intense feelings of experience happiness. The owner spent way more time working on their homes in that study. Now, one of the challenges in making the housing decision relates to affective forecasting, which is another concept that we've talked about on the podcast. People are just bad at forecasting what's going to make them happy in the future. And housing is just another example.

There's a neat study that I found of a German sample between 1991 and 2007. And they found no increase in life satisfaction among people who had purchased a new home because they were dissatisfied with their previous residents. Another really neat one, a 2003 study of first year Harvard students. They found that students predicted higher levels of happiness if they were assigned to more desirable housing. I guess at Harvard, there's like dorms that everyone agrees are the good ones and dorms that everyone agrees are the bad ones.

So students predicted that they'd be a lot happier if they were assigned to the good dorms. But then when they followed up in the future, there was actually no relationship between the students' happiness and their dorm assignment. So again, 2020 studies using German data finds that people overestimate the long run life satisfaction gains derived from moving from a rented home to a privately own property. And that people with extrinsically oriented life goals, overestimate the long run life satisfaction gains derived from moving from a rented home to a privately owned property, to a greater extent than people with intrinsically oriented life goals.

I thought that was really interesting. It's like the people who have goals based on stuff like well, property ownership, I guess that would make sense. They tend to overestimate the long run life satisfaction gains that they're going to get from moving from a rental to own a property. Whereas people who are more intrinsically motivated or have more intrinsically oriented life goals, they don't overestimate the benefits of owning property as much. It's interesting, right?

Cameron Passmore: Mm-hmm (affirmative).

Ben Felix: You can totally imagine the profile of someone who believes that they're going to be much happier in an owned home as being somebody with extrinsically oriented goals. I mean, I guess it just makes sense. Now that I'm talking about it, I'm saying it. People who have goals based on property, of course, they're going to think they're going to be happier by achieving something like owning a home, which is such a big property oriented goal.

One of the reasons that people are bad at affective forecasting is because we're hedonically adaptable. We adapt to our circumstances, most of our circumstances, but not all, both good and bad. And you can start to see the problem. We overestimate, how much happy we're going to be by moving into a new fancy home. And then once we live there, the evidence suggests that we're pretty quickly going to adapt. And the fancy new home is just going to become a condition of life rather than on an aspiration. And it's impact on daily wellbeing is going to be neutralized. It just becomes part of your routine.

So a 2010 paper, If Money Doesn't Make You Happy, Then You Probably Aren't Spending It Right. Great title. The authors explained that affective experience, daily experienced happiness is shaped mostly by how we spend our time throughout the day, rather than by the more stable circumstances like how we pay for housing, whether we're renting or owning a whole home.

In the case of buying a home, and this is their example from their paper. In the case of buying a home, happiness depends not only on the effects associated directly with home ownership, like I guess owning the home, but happiness is going to end up depending on the other aspects of daily life that are totally unrelated to how you're paying for housing. And they give examples of birthday cakes and concerts, faulty hard drives and burnt toast.

When you're making the decision to buy a home, those little details that seem irrelevant, they're obscured from view because we focus on the big future home purchase event. So that's what we're thinking about. But it's those little irrelevant details, not the big purchase that end up predicting happiness. So again, you can see the issue. And that effect can be summarized as something called vocalism.

People tend to fail to anticipate the unrelated events, which will influence future thoughts and emotions. You can easily see the big future event, but you miss all the little details, but it's the details day to day, minute to minute that are actually going to predict happiness.

Cameron Passmore: Which is what you were trying to highlight when your conversation about a recreation property was brought up. It's easy to imagine the Saturday afternoon by the dock on a beautiful day in July. But having a cottage as an example is a ton of other work.

Ben Felix: Yeah. It's a ton of other work and they gave other examples in the paper too. You think about that. You think about what you just said, but you don't think about the mosquitoes and you don't think about having to go there on a Thursday night to meet the plumber because there was an issue and you don't think about the...

Cameron Passmore: Pulling your dock out of freezing water in November.

Ben Felix: Yeah. Or the kids falling asleep in the car on the way home and having to wake them up and carry them into their beds. Little stuff like that, that you just don't think about. They give another one too, where people imagine that the cottage is going to be this great place for family to gather.

I can't remember the exact example, but they say something along the lines of, but nobody thinks about how they're going to decide whether or not they should invite aunt, whatever, who always has conflict with this other person in the family. So again, you think about this rosy picture of the family enjoying the time of the cottage, but even families are messier than that.

Another big one is buyers remorse. So anytime people make a major purchase, a house included, they'll often regret the decision or they'll spend time scrutinizing the decision. Those 2010 paper, the relativity of material and experiential purchases and they find in their sample that people are often less satisfied that by their material purchases than their experiential ones, because they're more likely to ruminate about unchosen options with material purchases.

They examine unchosen material purchases more than unchosen experiential purchases. And relative to experiences, the participants in their sample satisfaction with their material possessions is undermined more by comparisons to other available options, to the same option at a different price and to the purchase of other individuals.

People that buy stuff are just miserable about their purchases relative to people who buy experiences. They had to throw the relativity in there. One of the best ways to deal with our poor affective forecasting abilities to deal with hedonic adaptation and to deal with buyers remorse is to make more frequent, smaller experiential purchases, rather than few big material ones. Taking a friend out to dinner, signing up for a class in an area of interest, spending on an engaging hobby, buying things for other people.

Those are all approaches to spending money that brings persistent happiness, that we don't adapt to. You do those things once a week instead of making some big purchase. And on average, you're going to be a happier person than the person who bought one big material thing.

Now buying a home, you think about it, it is the antithesis of making small frequent purchases. A home is usually the largest purchase that that people make and it takes up a huge amount of financial resources. People say the term house poor from time to time. If you end up in a situation where you can't do all of the stuff that I just mentioned, because you're paying so much in mortgage payments and property tax and spending so much time changing halogen light bulbs, then you can end up in a not so great situation.

Cameron Passmore: And there's a ton of small frequent purchases after you buy the house.

Ben Felix: Yeah, but not experiential purchases though.

Cameron Passmore: No, they're not experiential.

Ben Felix: And then another big one in terms of adaptability. Another thing that we don't adapt to. So we adapt to good and bad circumstances most of the time, but one of the things, one of the bad circumstances... Well, I guess it's not always bad, but one of the circumstances that has a negative impact on wellbeing, that we don't adapt to is debt. So buying a house is part and parcel. I think for most people with taking on mortgage debt.

In the book, Happy Money: The Science of Happier Spending. Elizabeth Dunn and Michael Norton, they also wrote one of the papers I was talking about a minute ago. They explained that although the relationship between income and happiness is pretty weak, there's a much stronger relationship between happiness and having difficulty paying the bills.

And they say in their book that what we owe is a bigger predictor of our happiness than what we make. So the more you have in debt, the less happy you are, the more money you make. You're not necessarily going to be happier, which is the income satiation points idea that we've talked about a few times. They also point to evidence that households with more debt, exhibit less happiness and couples with more debt have more marital conflict.

Then there's another problem. There's lots of problems here. The other problem with material purchases like homes as it relates to happiness is social comparison. I briefly mentioned that earlier in one of the studies, but homes are positional goods, which means that their appeal comes not only from their interest intrinsic property as a place to live, but also from how the house compares to the homes of your peers.

And this is not something that you can just kind of say, "No, no, I won't do that." Humans innately compare themselves to the people around on them and empirically, we know that comparison matters a lot to happiness. There's one great study, kind of a classic study on this concept titled, Is More Always Better?: A Survey On Positional Concerns. And the authors of that study find that the respondents in their survey study preferred to have 50% less real income if it meant that their income was higher than those around them. People were willing to take a 50% cut in income as long as it meant that their income was higher than those around them. Crazy. Right?

Cameron Passmore: Yes. We talked about this before.

Ben Felix: Right. Now, can we apply that to housing? Ben, are we making too big of a jump here? How can we apply that to housing? Well, somebody actually studied that directly, which I thought was pretty interesting. So there's a 2019 study titled The McMansion Effect: Top House Size and Positional Externalities in US Suburbs. And that study for finds that new constructions at the top of the house size distribution, lower the satisfaction.

So if somebody builds a house bigger than all the other houses, it lowers the satisfaction that neighbors derive from their own house size. It's funny. These effects are stronger among people living in larger houses. So the decrease in satisfaction, if somebody builds a bigger house is stronger among people who live in larger houses and the effects decrease with the distance from larger new constructions. So interesting. Homeowners exposed to the construction of large houses in their suburb, put a lower price on their own home are more likely to upscale to a larger house and take on more debt.

Cameron Passmore: Can you imagine? That is wild.

Ben Felix: Isn't that wild? Some of the papers that I looked at in this field, they kind of generalized the channels through which housing can affect life satisfaction. So they generalize them as housing quality, economic effects, prestige, and freedom that there is empirical evidence. And I thought this was quite interesting too, because it does seem apparent anecdotally that there's empirical evidence, that rentals are not typically as nice as owned homes because owners take better care of their homes than renters do. That's kind of intuitive, but it was interesting to see that there's studies that have shown that it to be true.

Now, I thought about it though. I don't think it's a really a reason to buy instead of renting. It's just kind of a consideration for renters. I rented as people who listen to the podcast know for many years, and I always had really good experiences as a renter collaborating with the landlord or the property manager to do stuff, small improvements. A couple times we did bigger, bigger improvements. We actually split the cost of building a deck with a landlord in one of the places that I was renting. We lived there for four years. I think I got pretty good value out of it.

I don't know if it has to be true that as a renter you're going to take not as good care of your home and it's not going to be as nice of a place to live. I think that seems like something that we have some agency over as a renter.

Economic effects, these are real. Forced discipline for savings through principle repayments. Tax benefits in Canada, you're not taxed on gains on your primary residence. That's a big deal. This one's really interesting. This came up in John Cochrane's paper, Portfolios For Long-Term Investors too. An owned home, a home that you own is a hedge for housing costs.

Cochrane talks about that as similar to the risk-free asset for a long-term investors, the inflation index, life perpetuity. Well, a house is kind of the same thing. If you'd live in it forever, your exposure to changes in housing costs is relatively low compared to somebody, for example who's renting where rents can fluctuate quite a lot more. But I thought about this a lot ever since I read it in John's paper. If you live in a house forever, sure, it's a hedge against the cost of housing. But just like the life, the perpetuity, the inflation index perpetuity, if you have to sell it before you die, its mark to market. Price is going to be extremely volatile.

So it is risk-free, if you're going to own this perpetuity forever, because it gives you inflation index cash flow for life. But as John talked about in the podcast episode, it is going to vary in mark to market value significantly.

So from the perspective of volatility, it's not risk-free at all. It just comes back to what is your definition of risk. But with housing, and there's a paper that Fama and French did actually last year with a very creative title, House Prices and Rent. Then they looked at the relationship between house prices and rent, and they found that price changes are way more volatile than changes in rent.

Now, it's just interesting because a volatile price for a homeowner, not a big deal. Like I said, if you live there until you die, but it can affect mobility. I get mobility really summarize it. If you need to move for a job, if you need to move because the neighborhood is going in a direction you don't like or new neighbors that you're not getting along with, all that kind of stuff.

So as much as we can say that owning a home hedges the cost of housing, I think that's true. People getting rent-evicted and all that kind of stuff, that's not good either. But we were talking about this offline before we started recording, Cameron, that that's an issue in a rising market. In a falling market, you have a whole other set of issues. So I don't know how good of an argument that economic effect of hedging housing cost is unless you're certain that you're going to live in the same place forever.

Prestige is one of the other ones that I mentioned. Prestige is tricky because about the reasons that we talked about. Home ownership is associated with social status. Does that actually make people happier? Not obvious unless you have the biggest house in the street, I guess. Because we compare ourselves to everybody around us.

I touched on this one when we were talking about the hedging housing costs, but freedom is another really tricky one. I think there's this perception that owners can modify their property as they see fit and they can't be evicted. And then they're not going to get rent evicted. The rent is not going to get jacked up all that kind of stuff. And you equate that with freedom and it is true.

People are happier when they have control over their property, and there's studies that we've talked about in past episodes that cover that. As a renter, I've personally never felt constrained and how I could use a rented property. And the other nice thing about being a renter is that if you're unhappy with a residence, it's pretty easy to move. It's not free, but it's not too bad either.

Renters have much more mobility. They can easily move if they're unexpected problems with the house, neighborhood, employment situation. So I agree that owners can't be evicted, but they're also taking on all that price risk. So in a rising market, sure, you're maybe safer as an owner than as a renter. In a falling market, it's the opposite. So it's not really an obvious benefit from my perspective anyway.

Now another one there's a study that showed that owners are more likely to be forced to commute for the reasons we've been talking about. You end up stuck with a house, but you get a new job and therefore have to have a longer commute. That was an older study. The ability to work from home might have changed that, but I thought about it. Work from home, just exacerbates the other possible issues like, okay, you don't have the commuting issue anymore because you can work from home. But if you have an issue with the neighborhood or the house, then work from home just exacerbates that as a problem.

So if you're stuck with the owned home, it's just worse. So I don't think work from home solves those potential issues. Okay. So I think that the literature that we've reviewed here relating happiness to home ownership makes it pretty clear that it's pretty unclear. I think like any important decision, there's a ton of nuance. Homeowners are not automatically going to be happier than renters, even if they expect to be when they make the decision to buy a home, which they do.

People predict that buying a home is going to make them happy, and it doesn't always. Not as much as they expect it to. Homeowners spend a lot more time maintaining their home. And that's anecdotally obvious, but empirically verified by some of these papers, which I thought was kind of neat. And that is reflected in the average quality of owned homes relative to rentals, but it doesn't lead donors being happier.

That's an interesting point too actually is that all of those studies that we talked about that showed that homeowners are not happier than renters, they controlled for the quality of residents. So I'm saying owned homes tend to be nicer relative to rentals, but the studies we talked about relating it to happiness, controlled for that.

Cameron Passmore: For quality though.

Ben Felix: Yeah. And like we talked earlier, I think a renter is they're allowed to make their place nice too, just because the economic incentives aren't always there to do that. It Doesn't mean that you have to live in a dump. And we talked about time ownership. You and I were kind of chatting about that.

Personally, and I bought a house. I'm a homeowner at this time. I would rather own more of my time than own my home. I think there's a lot of evidence on time affluence housing like we've just talked about and happiness that I would agree with that. Owning your time is pretty important.

Owners also have to deal with buyer's remorse and the negative effects of social comparison, unless they've got the biggest house on the block. But in that case, they probably have a bigger debt load to deal with. So I don't know. None of this is obvious in favor of owning. I love the stuff on freedom that owners expect to have more freedom, but they give up on flexibility.

You can't just make a blanket statement that buying a home is a good decision from a non-financial perspective, which is that argument that I hear so often. But I also don't think we can say it's a bad decision. That's, to be clear, not the argument that I'm making here. It's just a decision like anything else that requires a lot of careful thought and intention about what kind of life you want to live?

What are the important factors in wellbeing for the individual making the decision? We've talked about John Zelenski's book in the past, Positive Psychology. He's got a massive literature review in that book on the relationship between spending time or living near nature and how that increases happiness. In the happiness hypothesis that I've talked about many times, Jonathan Hyde explains that noise, particularly variable or intermittent noise interferes with concentration and stress.

So maybe not living at a busy intersection or downtown. Commuting in heavy traffic, that's a big one. It Increases stress and we do not adapt to that. Commuting in no traffic is actually not an issue. It's just commuting in heavy traffic. Being in control is another big one. But I think the perception of control, that's pretty interesting. What exactly is control? But feeling of being in control increases happiness.

One of the other big ones is social connections. What is important to human happiness? Well, that's one of the big ones. So I think living in a place that's closer to family and friends and it allows for more social interactions. That's probably a big one. I've actually found that since I've lived where I am living now, I've seen friends more often than I did previously.

I think it's because it's like a bit of a destination where I live and so people want to come and go for lunch or whatever. I didn't expect that when I made the decision to live here, but that's been pleasant surprise. So I think making the housing decision based on all of those relevant inputs that I just mentioned that are empirically related to happiness, makes a lot more sense than rushing to buy a home on the pretense that it will make you happy given that there's no empirical evidence that that is the case.

So my decision, I bought a house in a semi rural area, not super rural, but it's within walking distance to a small town. So I can walk into town and have a meal or go to the small grocery store, all that kind of stuff. There's a community center, like all that... Not a tiny town. I've got hiking trails. I've got a body of water close by so I can go kayaking and hiking, literally whenever I want, I guess, as long as it's light out.

Still pretty close to my family. They live in Ottawa. So still kind of 30, 45 minutes away from them. I don't have a commute. And that was a big motivation to move because we are still working from home and plan to continue to do so. Like I mentioned earlier, I would have honestly rented a place here if I could have found a good long-term rental situation, but there's nothing. There are no rentals where I'm living, let alone house size, long-term rentals.

So that just wasn't in the cards if we wanted to live in this area, which we did. So that kind of made the decision for me. This place checked a lot of boxes, which meant we had to buy, but I didn't buy for the sake of buying.

Cameron Passmore: That's it.

Ben Felix: That's it. Buying a house will not make you happy, but it doesn't mean it's a bad decision.

Cameron Passmore: It's a good summary. Okay. We'll go into talking sense. These are the cards from the University of Chicago Financial Education Initiative. We've picked two cards. I picked two cards. I'll go first. We'll give your voice a rest. So do you believe someone's success is based on how much money they have? I would say emphatically, there's so many other things that can formulate what I would deem someone to be successful. Relationships, family, kids, attitude, interests. Interesting. Money's a scorecard, I guess, to some extent, but you don't know how they got it. You don't know how they treat it. And often that subject does not come up. So I would say, no, I don't believe that someone's success is based on how much money they have. What do you think?

Ben Felix: I think you can have someone who's extremely successful and doesn't have a lot of money. So you kind of flip it around.

Cameron Passmore: For sure.

Ben Felix: I think it's a big one what you said is that you have no idea how, if you're just looking at how much money somebody has in their bank account or in their investment accounts, you don't always know how they got it. I don't think it's a good measure of success at all.

Cameron Passmore: Here's a tough one. What is the least expensive thing you ever purchased that ended up being the most valuable or worthwhile?

Ben Felix: The least expensive?

Cameron Passmore: Well, something I know that right at the beginning of the pandemic I ordered was a set of hair clippers. I Took inspiration from you and those watching YouTube know that neither of us are particularly well known for our hairstyles.

Ben Felix: But for 40 bucks I got a pair of clippers. Now, it's a weekly thing.

Cameron Passmore: It clearly takes no talent to do neither ours, but it's just so fast, so efficient. And now Anna cuts James's hair. Most of the time he seems reasonably pleased with the outcome. So that's one thing that comes to mind.

Ben Felix: Least expensive, that's throwing me off. I need a list of my purchases from least to most expensive to give an answer. I bought a fan bike, like a Schwinn Airdyne fan bike at the beginning of the pandemic. That's not inexpensive, but it's been amazing to have when I can't get out to do exercise. You go on there for 20 minutes and it's pretty good full body workout. But the least expensive, it's tough. Geez. Yeah, that is tough one.

I think probably in aggregate, it's not inexpensive. I was going to say buying meals like ordering pizza for the family and all the kids enjoy it and stuff like that. Cheap is a one-off, but it adds up to being expensive. So I don't know if that counts as being inexpensive. Books probably could fit in there. That's a really good question.

Cameron Passmore: I don't have a better answer than what I gave. All right. So wrap it up there. We'll come back in a couple of weeks with some bad advice of the week, but again, thanks for listening.

Books From Today’s Episode:

The Great Mental Models Volume 3 — https://amzn.to/3aaQfJZ

Happy Money: The Science of Happier Spending— https://amzn.to/3iCAGiy

Positive Psychology: The Science of Well-Being — https://amzn.to/303BoiD

The Happiness Hypothesis — https://amzn.to/2PLng8X

Links From Today’s Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

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Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

'When Do Investors Freak Out?: Machine Learning Predictions of Panic Selling' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3898940

'The American Dream or the American Delusion?' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1877163

'Home Ownership and Happiness' — https://digitalcollection.zhaw.ch/bitstream/11475/18640/3/2019_Hofmann-Umbricht_Homeownership-and-happiness-Switzerland_SREJ.pdf

'If Money Doesn’t Make You Happy Then You Probably Aren’t Spending it Right' — https://scholar.harvard.edu/files/danielgilbert/files/if-money-doesnt-make-you-happy.nov-12-20101.pdf

'The Relative Relativity of Material and Experiential Purchases' — https://www.researchgate.net/publication/40869028_The_Relative_Relativity_of_Material_and_Experiential_Purchases

'Is More Always Better?: A survey on positional concerns' — https://www.sciencedirect.com/science/article/abs/pii/S0167268198000894

'The McMansion Effect' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3378131

'Portfolios for long-term investors' — https://www.johnhcochrane.com/research-all/long-term-portfolios