Homeownership and Its Effects on Human Development Index: A Comparative Study Among Selected ASEAN Nations

Abstract

Homeownership is widely considered an important driver of socio-economic progress, enhancing living standards and promoting economic stability. As a key measure of financial security and wealth, owning a home affect essential aspects of the Human Development Index (HDI), such as income, education, and health. As a crucial element of economic prosperity, homeownership affects these HDI indicators, with the act of owning a home seen as a pathway to financial independence, better quality of life, and long-term socio-economic security for individuals and households. This research sought to examine the relationship between homeownership and HDI in selected ASEAN nations over the period from 1990 to 2021. The study utilized data from the World Bank and the United Nations Development Programme, applying a series of statistical tests to validate the data, including unit root and Johansen Cointegration tests to ensure the series were stationary. To assess both long-term and short-term relationships between homeownership and HDI, the Vector Error Correction Model (VECM) was employed. The Fixed Effects (FE) model was also applied to test the direct effect of homeownership on education, life expectancy, and income. The results revealed a positive and significant influence of homeownership on these key indicators of human development, supporting the idea that homeownership contributes to better socio-economic outcomes. The results indicated that only Singapore showed no long-run relationship between homeownership and HDI, whereas in the other countries studied, homeownership had a positive and significant effect on various HDI indicators, such as income, education, and health. The study revealed that an increase in government expenditure on homeownership not only contributed to higher income levels and improved educational outcomes but also promoted better health outcomes. These findings were significant in the case of Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, and the results suggest that similar policies in other developing countries could potentially yield similar socio-economic benefits. The study advocates for the adoption of realistic and goal-driven expansionary housing policies to promote homeownership, which in turn can enhance the quality of life and spur economic development in both the short and long term.