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Vol.:(0123456789)
Social Indicators Research
https://doi.org/10.1007/s11205-024-03481-x
ORIGINAL RESEARCH
Homeownership, Income andSocial Trust: Exploring
Dynamics Between Homeownership, Income,
andIndividuals’ Perceptions ofAutonomy andSocial Trust
inSouth Korea
SeungwooHan1
Accepted: 12 November 2024
© The Author(s), under exclusive licence to Springer Nature B.V. 2024
Abstract
In recent years, scholarly attention to the relationship between housing wealth and its
broader social and political implications has intensified, particularly in response to grow-
ing wealth disparities in advanced capitalist societies since the 1980s. These disparities
have been further exacerbated by shifts in labor market conditions and welfare reforms
that have increased income and employment instability. This study investigates the inter-
play between homeownership, income, and social trust in South Korea, employing path
analysis to explore both the direct and indirect effects of homeownership on social trust,
with perceived autonomy serving as a mediating factor. Furthermore, the analysis exam-
ines how homeownership and income jointly influence autonomy and social trust, with a
specific focus on the moderating role of income. The findings reveal a positive association
between homeownership, autonomy, and social trust, with homeowners generally exhibit-
ing higher levels of both compared to non-homeowners. However, as income rises, these
differences diminish, underscoring the moderating effect of income. These results highlight
the pivotal role of homeownership, particularly for individuals facing heightened income
insecurity. In contexts such as South Korea, where real estate constitutes a substantial share
of assets, disparities in homeownership are pronounced, and welfare systems providing
income-based support are limited, the study emphasizes how homeownership critically
shapes social perceptions.
Keywords Homeownership· Income· Perceived autonomy· Social trust· South Korea
* Seungwoo Han
seungwoo.han@kyonggi.ac.kr
1 Department ofPolitical Science andInternational Relations, Kyonggi University, Suwon,
SouthKorea
S.Han
1 Introduction
Recent scholarship has increasingly examined the intersection of real estate, housing, and
social dynamics, driven by growing wealth disparities in advanced capitalist societies since
the 1980s (Ansell, 2014; Busemeyer & Iversen, 2020; Fuller etal., 2020; Hacker & Rehm,
2022; Hall & Yoder, 2022; Han & Kwon, 2024; Johnston & Regan, 2017; Larsen etal.,
2019; Piketty, 2014, 2020; Scheve & Stasavage, 2017). Housing wealth, in particular, has
gained prominence due to labor market shifts and welfare reforms that have intensified
income insecurity (Doling & Ronald, 2010; O’Brien, 2000; Standing, 1997; Viebrock &
Slasen, 2009). These socioeconomic transformations have spurred inquiry into how hous-
ing wealth influences individual perceptions and broader social and political outcomes.
While a substantial body of literature explores the effects of housing wealth on political
preferences (Hall & Yoder, 2022), policy orientations (Ansell, 2014), and social attitudes
(Han & Kwon, 2024), the relationship between homeownership, income, and social trust
remains less understood. This gap is particularly important in light of the broader context
of wealth inequality (Piketty, 2014) and the rise of asset-based welfare as a response to
income insecurity (Doling & Ronald, 2010). This study seeks to address this gap by exam-
ining how homeownership and income—encompassing both real estate holdings and liquid
financial assets—influence social trust. By clarifying the mechanisms that link these fac-
tors, the research underscores the importance of further academic inquiry into these inter-
related dynamics.
The research begins by using path analysis to investigate both the direct and indirect
effects of homeownership on social trust, particularly emphasizing the mediating role of
personal autonomy. This method lays the groundwork for understanding the pathways
through which homeownership influences social trust. This study further examines the
interaction between homeownership and income, focusing on how income moderates the
relationship between homeownership, personal autonomy, and social trust. By conduct-
ing detailed regression analyses, the research provides a comprehensive understanding
of how these variables interact to shape individual perceptions and their broader societal
implications.
Fig. 1 Theoretical models
Homeownership, Income andSocial Trust: Exploring Dynamics…
In the current global landscape, economic inequality has become a critical issue (Chan-
cel and Piketty, 2021; Piketty, 2014), coinciding with a third wave of autocratization that
signals a global decline in democracy (Lührmann & Lindberg, 2019). Scholars have exten-
sively examined the relationship between economic inequality and the health of democratic
institutions, exploring how economic disparities can either strengthen or weaken demo-
cratic governance (Acemoglu & Robinson, 2006; Boix, 2003; Haggard & Kaufman, 2012;
Houle, 2009).
Within this context, the present study seeks to explore how economic disparities, spe-
cifically through the lens of homeownership and income, influence social trust—an often
underexamined factor in discussions of wealth inequality and democracy. This study pro-
vides empirical evidence that the interaction between homeownership and income signifi-
cantly affects social trust. Figure B1, B2, B3 and B4 in Appendix B presents data showing
the trends of increasing wealth inequality alongside the erosion of democratic institutions.
Given that social trust is essential for maintaining democratic systems (Coleman, 1990;
Fukuyama, 1995; Putnam, 1993; Wilkinson & Pickett, 2009), understanding what drives
its increase or decline is particularly crucial in an era marked by significant economic
inequality and democratic erosion. This study aims to clarify these mechanisms, offering
insights into the complex relationships between homeownership, income, and social trust.
In South Korea (hereafter referred to as Korea), real estate, particularly housing, is a
significant indicator of social status and economic class. The stark contrast between afflu-
ent areas such as Gangnam and less affluent areas like Gangbuk illustrates spatial stratifi-
cation, where social and economic inequalities are reflected and reinforced through geo-
graphic divisions (Bae & Joo, 2020; Ha, 2002; Han, 2022; Yang, 2018). The importance
of homeownership in Korea has been further accentuated by the economic shifts following
the 1997 Asian Financial Crisis, which intensified the focus on asset accumulation as a
response to rising income insecurity (Keum & Cho, 2001; Lee & Yang, 2018; Oh, 2020;
Shin & Jang, 2011; Weon & Rothwell, 2020). In the context of labor market insecurity
(Kang, 2021) and a relatively limited welfare system that provides income-based support
(Yang, 2017), homeownership has emerged as a crucial form of private insurance (Han
& Kwon, 2024). This study examines the interplay between homeownership, income, and
social trust, offering valuable insights for policymakers and enhancing the broader under-
standing of these relationships within Korea’s specific socioeconomic landscape.
The initial analysis shows that homeownership is positively linked to higher levels of
perceived autonomy, which in turn enhances social trust. This reveals a dual mechanism:
homeownership directly contributes to social trust and indirectly does so by increasing per-
ceived autonomy, which further strengthens trust in social interactions. Subsequent analy-
sis finds that income moderates this relationship. As income rises, the differences in per-
ceived autonomy and social trust between homeowners and non-owners diminish. Notably,
non-owners experience significant gains in both autonomy and social trust with increased
income, reducing the gap with homeowners. These results suggest that higher income lev-
els can mitigate the disadvantages of non-homeownership, offering an alternative route to
achieving similar levels of autonomy and social trust.
The findings emphasize the critical role of homeownership, particularly for individu-
als who are unable to significantly increase their income in the context of rising income
insecurity stemming from labor market shifts and welfare state reforms. In such cases,
homeownership assumes even greater importance. This is particularly relevant in contexts
marked by significant disparities in homeownership, where real estate comprises a substan-
tial portion of total assets and welfare systems offering income-based support are limited,
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as exemplified by Korea. In such settings, homeownership plays a crucial role in shaping
individuals’ perceptions within the broader social framework.
2 Homeownership, Income andSocial Trust
2.1 Homeownership andSocial Trust
Recent scholarship has increasingly highlighted the critical role of housing wealth in shap-
ing individuals’ financial portfolios and overall well-being (Ansell, 2014; Piketty, 2017,
2020). Housing assets not only contribute to financial stability but also significantly influ-
ence homeowners’ perceptions of economic security (Ansell, 2014, 2019; Busemeyer
& Iversen, 2020; Fuller etal., 2020; Hacker & Rehm, 2022; Hall & Yoder, 2022; Han,
2024a; Johnston & Regan, 2017; Larsen etal., 2019; Scheve & Stasavage, 2017; Yang,
2024). Theoretical frameworks such as the permanent income hypothesis and the life cycle
hypothesis suggest that assets like homeownership facilitate consumption smoothing and
provide a buffer against labor market uncertainties (Carroll, 1997; Friedman, 1957; Mod-
igliani, 1986). This becomes particularly pertinent in the context of rising wealth inequality
and labor market volatility, where homeownership plays a significant role in shaping indi-
viduals’ perceptions of their financial standing (Piketty, 2017, 2020; Caldbick etal., 2014;
Doling & Ronald, 2010; Standing, 1997; Viebrock & Slasen, 2009).
Social trust, understood as the reliance on the presumed goodwill of others or society
at large, is essential for social cohesion and the effective functioning of democratic institu-
tions (Fukuyama, 1995; Putnam, 1993, 1995, 2001). Conversely, social distrust reflects a
skepticism toward the integrity and functionality of societal institutions, often leading to
a weakening of social bonds and institutional efficacy (Egan, 2008). Research consistently
demonstrates a positive relationship between socioeconomic status and social trust, as well
as between subjective well-being and social trust (Alesina & La Ferrara, 2002; Bjørnskov,
2008; Gallou, 2022; Helliwell & Putnam, 2007; Klein, 2013; Leung etal., 2011; Xu etal.,
2023).
Wilkinson and Pickett (2009) suggest that cognitive processes, shaped by social struc-
tures, play a critical role in influencing individual perceptions and behavior. The norms and
rules embedded within these structures shape how individuals perceive and react to social
disparities, which, in turn, can erode trust in societal institutions. Goffman (1963) empha-
sizes that trust is shaped by formative experiences. Building on these insights, this study
hypothesizes that homeownership affects social trust both directly and indirectly, with per-
ceived autonomy serving as a key mediating factor.
The direct impact of homeownership on social trust is linked to the stability, security,
and sense of belonging that it provides. Extensive literature supports the benefits of home-
ownership, such as enhanced psychological stability, personal growth, and community
attachment, all of which contribute to increased social trust (Curtis etal., 2020; Dupuis &
Thorns, 2002; Fox, 2007; Hiscock etal., 2001; Mallett, 2004; Park and Kim, 2023; Saun-
ders, 1990; Stajkovic & Stajkovic, 2024; Will & Renz, 2023).
Homeownership offers a sense of security through the ownership rights associated
with property, fostering emotional stability and self-confidence (Saunders, 1978, 1990).
This stability allows individuals to establish long-term roots in their communities, culti-
vating a sense of permanence and belonging that is essential for developing social trust.
Homeownership, Income andSocial Trust: Exploring Dynamics…
Additionally, homeownership promotes the development of social capital by encouraging
networks, norms, and trust, which strengthen civil society and contribute to social order
(Clark, 2021; Cook, 2022). Equitable access to homeownership further enhances social
trust by creating physical spaces that foster personal connections, community engagement,
and a sense of responsibility toward communal well-being (Aarland & Reid, 2019; Cramm
etal., 2013; Edel etal., 1984; Rohe & Stewart, 1996; Sait & Jivraj, 2022).
Indirectly, homeownership influences social trust by enhancing personal autonomy—the
capacity to make independent choices and exert control over one’s life, which is fundamen-
tal to psychological well-being (Deci & Ryan, 2000). When individuals feel autonomous,
they experience empowerment and self-determination, fostering confidence in social inter-
actions and a greater likelihood of trusting others.
The economic stability and control associated with homeownership contribute to this
sense of autonomy (Carroll, 1997). Secure housing enables individuals to make life deci-
sions with confidence, knowing they have a reliable foundation. This increased autonomy
not only enhances psychological well-being but also strengthens social trust, as individuals
who feel secure and in control are less vulnerable and more inclined to trust others (Cramm
etal., 2013; Rohe & Stewart, 1996).
In contrast, the absence of homeownership can undermine a sense of control, negatively
affecting autonomy and, consequently, social trust (Henry, 2009). Without the stability that
homeownership provides, individuals may face economic and social insecurity, leading to
feelings of instability and helplessness (Mirowsky & Ross, 2003; Pearlin etal., 1981; Ross
& Mirowsky, 2013; Taylor & Seeman, 1999). This lack of control can weaken confidence
in social interactions, prompting defensiveness and diminishing trust in social structures
and others (Henry, 2009, 2011).
2.2 Moderating Role ofIncome
The second hypothesis explores how income moderates the relationship between home-
ownership, perceived autonomy, and social trust, offering important insights into finan-
cial behavior. When an individual’s financial portfolio is heavily reliant on real estate
and income growth is limited, homeownership plays a crucial role in shaping perceived
autonomy and social trust. However, as income increases substantially, the relative impor-
tance of homeownership diminishes, reducing its impact on these factors. Notably, while
increased income may not significantly enhance autonomy and social trust for homeown-
ers, it can lead to substantial improvements in these areas for non-owners.
Ansell (2014) posits that individuals should ideally stabilize their consumption over a
lifetime by relying on assets like homeownership, which provide long-term financial secu-
rity, rather than being overly influenced by short-term income fluctuations. However, when
there is a significant increase in liquid income, this can have a more immediate effect on
consumption behavior, especially for non-homeowners who depend primarily on their
income for financial stability.
The validity of permanent income and life cycle models has been a subject of debate in
economics. Studies by Crook (1996), Hansen and Singleton (1983), Mankiw etal. (1985),
Olekalns (1997), and Tullio and Pagano (1989) have emphasized the role of liquidity con-
straints as a critical factor in these models. Flavin (1985) contends that the sensitivity
of consumption to current income is partially due to these constraints, which shape how
individuals adjust their spending. Ganong and Noel (2019) further argue that consump-
tion behavior often aligns with models of present-biased households, where spending
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decisions are more influenced by current financial conditions than by rational liquidity
considerations.
For non-homeowners, a significant increase in liquid income can substantially enhance
financial security, enabling them to cover daily expenses, save for future needs, and man-
age unexpected financial challenges more effectively. While homeownership offers finan-
cial security, substantial income growth provides an alternative route to stability for non-
owners, thereby reducing their economic vulnerabilities. In contrast, homeowners may not
experience the same degree of increased financial resilience in response to income changes.
Thus, examining the interaction between income and homeownership offers a nuanced
understanding of how financial composition and security influence individuals’ sense of
control over their lives and their trust in societal structures and others. In this context,
although both income and homeownership indicate economic status, they represent differ-
ent dimensions—income reflects current financial capability, while homeownership signi-
fies accumulated wealth and long-term stability. Therefore, these factors are complemen-
tary, rather than substitutive, in shaping economic security.
2.3 Theoretical Framework andHypotheses
Building on the literature reviewed in the preceding subsections, this study proposes a the-
oretical model to examine the relationships between homeownership, income, perceived
autonomy, and social trust. The model is grounded in the premise that homeownership
plays a central role in shaping social trust by offering individuals a stable and secure living
environment. This stability extends beyond the physical realm to encompass emotional and
psychological dimensions, fostering a sense of belonging and community attachment, both
of which are crucial for the development of social trust.
Moreover, the model hypothesizes that the influence of homeownership on social trust
is not solely direct. It posits an indirect pathway through which homeownership enhances
perceived autonomy—the belief that one has control over their life circumstances. This
perceived autonomy, bolstered by the security that homeownership affords, in turn, fos-
ters confidence in social interactions, thereby strengthening social trust. The underlying
assumption is that individuals who feel more autonomous are more likely to trust others
and engage positively within their communities. The relationships discussed here are visu-
ally represented in Fig.1a.
Furthermore, the model incorporates income as a moderating variable that potentially
alters the dynamics between homeownership, perceived autonomy, and social trust. It sug-
gests that as income increases, the disparities in autonomy and social trust between home-
owners and non-owners may diminish. Seeing Fig.1b, in this model, income is positioned
as a moderating variable, intersecting the pathways between homeownership and perceived
autonomy, as well as between homeownership and social trust. For non-owners, signifi-
cant income growth could compensate for the lack of homeownership by providing alterna-
tive means to achieve financial stability and autonomy, thus enhancing their social trust.
Conversely, for homeowners, while income remains important, its relative impact on social
trust may be less pronounced, as the stability and autonomy provided by homeownership
are already established. Based on the theoretical models, the following hypotheses are
proposed:
Homeownership, Income andSocial Trust: Exploring Dynamics…
Hypothesis 1 (H1) Homeownership is positively associated with higher levels of per-
ceived autonomy, which, in turn, enhances social trust. This hypothesis posits a dual
mechanism: homeownership directly fosters social trust by providing stability, and indi-
rectly through its impact on perceived autonomy, which further promotes trust in social
interactions.
Hypothesis 2 (H2) The relationship between homeownership, perceived autonomy, and
social trust is moderated by income. Specifically, as income increases, the disparities in
perceived autonomy and social trust between homeowners and non-owners decrease. Non-
owners, in particular, are anticipated to experience significant gains in autonomy and social
trust with rising income, thereby narrowing the gap with homeowners. This hypothesis
suggests that higher income levels can mitigate the disadvantages of non-homeownership,
offering an alternative pathway to achieving comparable levels of autonomy and trust.
3 Homeownership intheKorean Context
The social implications of real estate and its connection to Korean society are exemplified
by a controversial 2023 apartment advertisement in Banpo-dong, Seocho-gu, Seoul, Korea.
The advertisement, stating, "We’ve built this for those who’ve always dreamt of an unequal
world," reflects the societal preference for living in Gangnam, an esteemed residential area
in Seoul (The Korea Herald, 2023). This promotion highlights Korean society’s aspirations
towards real estate while also exposing explicit classism.
In Korean society, geographical spaces carry significant symbolic power, as seen in the
distinctions between the capital metropolitan region and rural provinces, within and out-
side of Seoul, and between the affluent Gangnam area (south of the Han River) and the less
affluent Gangbuk area (north of the Han River). These spatial divisions reflect individual
identities, social statuses, and economic classes (Bae & Joo, 2020; Ha, 2002; Han & Lee,
2022; Han, 2022, 2024b; Lee & Han, 2024; Yang, 2018). Real estate, particularly housing,
embodies this symbolic power, often referred to as the “Republic of Real Estate.”
The importance of real estate in Korean society has roots in East Asia’s agrarian leg-
acy, where rice farming was predominant (Talhelm et al., 2014). This significance was
amplified during the rapid economic growth of the 1970s and 1980s, especially with the
development of Gangnam, driven by a real estate boom that shaped societal values (Yang,
2018). The 1997 Asian Financial Crisis further transformed the Korean economy, leading
to a stronger focus on asset and capital flows, along with increased income and employ-
ment insecurity (Oh, 2020; Shin & Jang, 2011; Keum & Cho, 2001; Lee and Yang, 2017).
Korean housing policy, characterized by a supply-driven approach aimed at expanding
housing stock, has led to unintended consequences, including distorted housing distribu-
tion, increased speculation, and significant polarization of housing wealth (Ronald & Jin,
2010). Figure2 illustrates a distinct contrast in homeownership rates between provinces
and gun units, compared to metropolitan areas and large cities. Homeownership rates
among households in provinces and gun units range from 70 to 80%, significantly surpass-
ing the rates in metropolitan areas and large cities, which hover around 30% to 40%. On
a broader national scale, approximately 57% of households are homeowners, highlighting
substantial disparities in homeownership across various regions.
S.Han
To fully understand the impact of real estate in Korea, it is essential to examine the
regional polarization of homeownership. As shown in Fig.3a, homeownership rates in
2020 were 43.4% in Seoul, 60.8% in Incheon, and 55.2% in Gyeonggi province—among
the lowest in the country. In particular, Seoul’s homeownership rate is around 40%, sig-
nificantly below the national average, while Gyeonggi province is only slightly below it.
Although homeownership rates have been rising in these regions, they remain among the
lowest nationwide.
Fig. 2 Map and distribution of homeownership at the district level Note: See Appendix B for details
Fig. 3 Homeownership changes and diffusion ratio of house and homeownership Note: See Appendix B for
details
Homeownership, Income andSocial Trust: Exploring Dynamics…
Figure 3b reveals that Korea’s housing diffusion ratio exceeded 100% in 2008
and continued to increase, reaching 103.6% by 2020. However, homeownership rates
remain just above half of this ratio, indicating that housing ownership is concentrated
within a specific group, despite an adequate housing supply. Figure B5 further illus-
trates that homeownership rates in Korea are relatively low compared to other coun-
tries. Figure4 illustrates the asset composition of Korean households, highlighting
a significant emphasis on real assets. On average, 66.7% of a household’s assets in
Korea are in real assets, mainly real estate, while financial assets make up only 19%.
This proportion of real assets is notably higher than in other OECD countries (OECD/
Eurostat, 2015), indicating a strong preference for real estate investments in Korea.
Additionally, as shown in Figure B6, Korea’s social spending is much lower than in
other OECD countries, reflecting its limited welfare state (Yang, 2017). In this con-
text, homeownership becomes even more critical as a form of private insurance.
In summary, the Korean context underscores four key points. First, real estate, par-
ticularly housing, holds significant symbolic and social power, influencing identities,
social hierarchies, and economic classes. Second, there are substantial regional dis-
parities in homeownership rates, with higher rates in provinces and gun units com-
pared to metropolitan areas and large cities, reflecting differences in housing afford-
ability and access. Third, while Korea’s housing diffusion ratio has exceeded 100%,
indicating a surplus in housing supply, homeownership rates remain much lower, sug-
gesting a concentration of housing ownership among certain groups. Lastly, Koreans
allocate over 60% of their wealth to real assets, primarily real estate, highlighting the
central role of homeownership in their financial portfolios.
4 Methods andData
4.1 Methods
This section provides an overview of the data, methods, and findings from two com-
plementary analyses. For methods, the first analysis employs path analysis, a subset of
Fig. 4 Composition of household assets in 2022 Source: K·indicator (https:// www. index. go. kr/ unify/ idx-
info. do? idxCd= 8087)
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Structural Equation Modeling (SEM), to examine the relationships among homeown-
ership, perceptions of autonomy, and social trust. Path analysis is well-suited for this
study as it allows for the exploration of directional relationships among observed vari-
ables, providing a structured framework to test the hypothesized model. Specifically, it
reveals how homeownership influences social trust, with autonomy acting as a media-
tor. This approach enhances our understanding of the direct and indirect effects within
the model and the significance of these relationships.
The second analysis builds on this by examining the interaction between homeown-
ership and income, and their combined effects on autonomy and social trust, using
a series of regression models. These models quantify the individual and interactive
impacts of homeownership and income, shedding light on how these factors contribute
to the outcomes of autonomy and social trust. Together, these analyses offer a com-
prehensive view of the connections between homeownership, income, autonomy, and
social trust. The integration of findings from both path analysis and regression models
not only supports the hypothesized relationships but also uncovers potential mecha-
nisms through which homeownership and income interact to influence social trust.
4.2 Data
Both analyses in this study utilize data from the 2020 and 2021 Korean Happiness Sur-
vey, conducted by the National Assembly Futures Institute, a public think tank affiliated
with the National Assembly. The survey follows OECD guidelines for measuring sub-
jective well-being and includes responses from over 31,000 individuals representative of
Korean society. It covers a wide range of variables related to happiness, inequality, atti-
tudes, beliefs, social values, and activities, providing a comprehensive understanding of the
socio-psychological factors influencing well-being. Key variables related to homeowner-
ship, autonomy, and social trust, essential for this analysis, are also included.
Data were collected through door-to-door interviews using tablet PCs, with a sampling
frame constructed via nationwide multi-stage stratified cluster sampling. This method com-
bined Probability Proportionate to Size (PPS) sampling for aggregate levels with random
sampling at the household level, ensuring a robust and representative dataset.
Although the survey reports a homeownership rate of around 78%, approximately 20
percentage points higher than the actual rate, this discrepancy does not undermine the
validity of the findings. Appendix B (Figure B7) demonstrates a strong correlation between
the actual homeownership rate and the rate reported by survey respondents, supporting the
reliability of the data.
The variables in this study are measured as follows: Individual autonomy is assessed
by asking respondents, "To what extent do you perceive yourself as having the autonomy
to make decisions and lead a life that aligns with your personal aspirations?" Responses
are given on a scale from 1 to 10, with higher scores indicating greater autonomy. Social
trust is measured by asking respondents to rate their agreement with the statement, "Most
people in the society where I live are trustworthy," using a scale from 1 to 5, where higher
values reflect greater trust. The primary explanatory variable, homeownership, is coded as
1 for homeowners and 0 for renters. Personal income is rated on a scale from 1 to 12.
To account for the influence of other factors on perceptions of social trust, the analysis
includes socioeconomic and demographic controls such as education, age, sex, marital sta-
tus (Alesina & La Ferrara, 2002; Brehm & Rahn, 1997; Helliwell & Putnam, 2007; How-
ard and Gilbert, 2008; Thomson and Rafiqi, 2020), religion (Putnam & Campbell, 2010;
Homeownership, Income andSocial Trust: Exploring Dynamics…
Welch etal., 2004), and political orientation (Delhey & Newton, 2005; Newton, 2001).
These controls are measured as follows: education (rated on a 1 to 5 scale), age (1 to 6
scale), and political orientation (1 to 10 scale). Binary variables include sex (1 = female),
marital status (1 = cohabiting with a spouse or partner), and religious affiliation (1 = reli-
gious). For a detailed summary of these variables, refer to Appendix A.
In the first and second analyses, categorical variables such as income, age, and educa-
tion could be treated as distinct categories. However, in these analyses, they are treated as
continuous variables, a decision justified by the fact that these variables represent ordinal
scales with natural ordering and consistent intervals. Gelman and Hill (2007) suggest that
ordinal categories with equal intervals can approximate continuous scales, which facili-
tates more streamlined and interpretable models. Long (1997) highlights the utility of this
approach in socioeconomic research, while Winship and Mare (1984) argue that treating
ordinal variables as continuous can maintain interpretability without adding unnecessary
model complexity. Cohen etal. (2003) further affirm that this method allows for smooth,
linear interpretations across ordinal levels, thereby providing a theoretically and methodo-
logically sound foundation.
In the first analysis, the variable, income, is controlled to isolate its general impact on
autonomy and social trust, thereby ensuring that any observed variations in these outcomes
can be attributed specifically to homeownership rather than to differences in income. In
the second analysis, income is introduced as a moderator to examine how the relationship
between homeownership and autonomy—and, consequently, social trust—varies across
different income levels. This approach recognizes that the advantages of homeownership
may not be uniformly distributed and could be more significant for individuals with lower
incomes, while potentially differing for those with higher incomes.
5 Estimation Assessments
5.1 Direct andIndirect Effects ofHomeownership
Analysis 1 examines the relationship between homeownership, perceptions of autonomy,
and social trust using path analysis. Analysis 1 applies path analysis to analyze the relation-
ship between aforementioned variables and the equations are as follows. In terms of the
indirect effects, equation for Social Trust is as following.
where
𝛽1,𝛽2
are the path coefficients representing the direct effects on Social Trust. Next,
equation for Autonomy is as following:
where
Xi
represents the eight observed variables as controls (Income, Occupation, Educa-
tion, Sex, Age, Marriage, Political Orientation and Religious),
𝛽i
are the path coefficients.
In addition to the indirect effects through Autonomy above, the model posits direct effects
of the observed variables on Social Trust. This is represented by adding terms to the Social
Trust equation:
(1)
SocialTrust(S)=𝛽1Homeownership +𝛽2Autonomy +𝜀1
(2)
Autonomy(A)=
10
∑
i=3
𝛽iXi+𝛽11 ⋅Homeownership +𝜀
2
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In the presented path analysis, the
𝛽i
coefficients signify the direct influence exerted by
each observed variable on Social Trust. This path analysis framework incorporates two pri-
mary components: path coefficients (β) and error variances (ε), which are deduced through
maximum likelihood estimation. This method utilizes the observed covariance matrix of
the variables under study.
The analysis presented in Fig.5 illuminates several relationships between work hours,
autonomy, and social trust. The data reveals a statistically significant positive effect
of homeownership on autonomy, as evidenced by an estimated coefficient of 0.102 and
a p-value of 0.0. This finding suggests that homeownership is associated with increased
autonomy. Additionally, autonomy exerts a significant positive influence on social trust, as
indicated by an estimated coefficient of 0.104 and a p-value of 0.0. Furthermore, a direct
and significant positive relationship between homeownership and social trust is identified,
with an estimated coefficient of 0.145 and a p-value of 0.0. These results collectively sup-
port Hypothesis 1.
The analysis underscores the critical importance of perceived autonomy. The substan-
tial influence of autonomy suggests that enhancing individual autonomy is a crucial factor
for fostering social trust. Notably, the role of homeownership is central in this context, as
homeownership positively impacts autonomy, which in turn leads to increased social trust.
Moreover, homeownership directly enhances social trust. The findings provide a frame-
work for understanding how homeownership and autonomy play pivotal roles in shaping
social trust.
5.2 Moderating Role ofIncome
Analysis 2 investigates the interaction between homeownership, income, and their com-
bined effects on autonomy and social trust, as proposed in Hypothesis 2. The data and
variables employed in these analyses are consistent with those used in Analysis 1. Ordinary
(3)
SocialTrust
(S)=
19
∑
i=12
𝛽iXi+(Pr evioustermsinSocialTrustequation
)
Fig. 5 Path analysis for Social Trust Note: Controls and path analysis fit indices are not reported. Please see
TableB4 and B5 for full results
Homeownership, Income andSocial Trust: Exploring Dynamics…
Least Squares (OLS) models are employed for their intuitive interpretation, with Ordered
Probit model results provided in Appendix C, demonstrating similar qualitative outcomes.
To account for potential regional effects at the metropolitan and province levels (such
as Seoul, Gyeonggi-do, and Jeollanam-do), as well as year-specific effects across different
survey rounds, fixed region (
𝜃r
) and fixed year (
δt
) effects are incorporated.
𝜺i,r,t
is the error
term for individual i, clustered by region r and year t. Region-clustered standard errors are
included in the model to account for regional differences in income levels and house val-
ues. This approach addresses the variations in homeownership, house prices and income
level across different regions, providing a more robust and comprehensive analysis of the
data. The control variables (X) included in the analysis are the same as in the previous
analysis. The regression model equations are formulated as follows:
The results are presented in Table1 based on Eq.(4), which includes five regression
models: model 1 without controls, region and year fixed effects, and the interaction vari-
able; model 2 with region and year fixed effects; model 3 with the interaction between
homeownership and income added to model 2; model 4 with controls and region and
year fixed effects but without the interaction variable; and finally, model 5 with controls,
the interaction variable, and region and year fixed effects. The full results can be found
in TableB4 in the Appendix.
Across all models, the estimated coefficients consistently show a positive and sta-
tistically significant relationship for homeownership, providing strong evidence in sup-
port of the first hypothesis. This indicates that individuals who own homes generally
(4)
Autonomy(A)=𝛽
1
Homeownership
i
+𝛽
2
Income
i
+𝛽
3
(Homeownership
i
⋅Income
i
)
+
∑
j
𝛽jXj,i+𝜃r+𝛿t+𝜀i,r,t
(5)
SocialTrust(S)=𝛽
4
Homeownership
i
+𝛽
5
Income
i
+𝛽
6
(Homeownership
i
⋅Income
i
)
+
∑
k
𝛽kXk,i+𝜃r+𝛿t+𝜀i,r,t
Fig. 6 Predicted effect by homeownership and its marginal effect on autonomy Note: Based on model 5 of
Table1
S.Han
perceive higher levels of autonomy compared to those who do not own homes. How-
ever, when considering model (5) and including the interaction between homeownership
and income, a more nuanced finding emerges. The interaction effect reveals a negative
impact of homeownership on perceived autonomy. To further elucidate these findings,
Fig.6 presents a graphical representation of the aforementioned results, offering a more
comprehensive explanation and visual illustration of the relationship between home-
ownership, income, and perceived autonomy.
In Fig. 6a, the predicted value of autonomy by homeownership is depicted while
controlling for other variables at their means. The estimates are accompanied by 95%
confidence intervals to account for prediction uncertainties. For homeowners, the pre-
dicted value of autonomy increases from 6.5 to 7.0 as income ranges from the minimum
value of 1 to the maximum value of 12. Similarly, individuals without homeownership
experience an increase in the predicted value of autonomy from 6.3 to 7.1 as income
Fig. 7 Predicted effect by homeownership and its marginal effect on trust Note: Based on model 5 of
Table3
Table 1 Homeownership, income and autonomy
Controls are not reported. See TableB6 in Appendix B for full results. Region clustered standard errors in
parentheses: * p < 0.1, ** p < 0.05, *** p < 0.01
DV: Autonomy
(1) (2) (3) (4) (5)
Homeownership 0.033* (0.018) 0.059***
(0.017) 0.175*** (0.04) 0.126***
(0.017) 0.215*** (0.039)
Income 0.065***
(0.004) 0.067***
(0.003) 0.094***
(0.009) 0.048***
(0.004) 0.069***
(0.009)
Homeownership
× Income −0.032***
(0.01) −0.025***
(0.01)
Controls √ √
Region FE √ √ √ √
Year FE √ √ √ √
N 31,181 31,181 31,181 31,115 31,115
Homeownership, Income andSocial Trust: Exploring Dynamics…
varies. The results indicate a disparity in perceptions of autonomy between homeown-
ers and non-owners in lower income brackets. However, this gap gradually diminishes
and becomes statistically insignificant as income levels rise. This finding strongly sup-
ports the second hypothesis, highlighting the importance of income stability as a mod-
erator between homeownership and autonomy. In other words, individuals with higher
incomes are more likely to perceive a sense of autonomy, regardless of their homeown-
ership status.
In Fig.6b, the marginal effect of homeownership on autonomy is depicted, taking into
account the moderating effect of income. The binning estimator (Hainmueller etal., 2019)
is utilized to estimate this effect. The graph illustrates that as income, the moderator vari-
able, increases, the marginal effect of homeownership on autonomy decreases. This pattern
is statistically significant among all income groups. Specifically, it elaborates on the results
observed in Fig.5a that the statistical difference in the marginal effect of homeownership
between the two groups disappears in the higher income brackets. These findings indicate
that the influence of homeownership on the dependent variable, autonomy, diminishes as
income increases, supporting the notion that income plays a role in moderating the rela-
tionship between homeownership and perceived autonomy.
The subsequent analysis based on Eq.(5) examines the association between home-
ownership, income, and social trust. This analysis employs the same control variables and
analysis models as described in the above analysis. The findings presented in Table2 dem-
onstrate that homeownership exhibits statistically significant and positive effects across all
models, providing empirical support for Hypothesis 1 outlined in this study. However, the
interaction effect observed between homeownership and income is particularly intriguing.
This interaction effect displays a negative trend, indicating a moderating role of income
between homeownership on social trust. Put differently, these results align with the out-
comes of Analysis 1 and provide evidence supporting Hypothesis 2, which posits that as
income levels increase, the disparity in social trust between individuals who own homes
and those who do not gradually diminishes.
Figure 7 provides a more comprehensive explanation of aforementioned findings.
Figure7a illustrates the predicted values of social trust based on homeownership while
Table 2 Homeownership, income and social trust
Controls are not reported. See TableB7 in Appendix B for full results. Region clustered standard errors in
parentheses: * p < 0.1, ** p < 0.05, *** p < 0.01
DV: Social trust
(1) (2) (3) (4) (5)
Homeownership 0.155***
(0.011) 0.145***
(0.011) 0.227***
(0.024) 0.146***
(0.011) 0.228***
(0.025)
Income 0.016***
(0.002) 0.017*** (0.002) 0.036***
(0.005) 0.017***
(0.002) 0.036***
(0.005)
Homeownership
× Income −0.023***
(0.006) −0.023***
(0.006)
Controls √ √
Region FE √ √ √ √
Year FE √ √ √ √
N 31,181 31,181 31,181 31,115 31,115
S.Han
controlling for other variables at their mean values. The estimates are accompanied by 95%
confidence intervals to capture prediction uncertainties. Among homeowners, the predicted
value of social trust increases from 3.4 to 3.6 as income ranges from the minimum value
of 1 to the maximum value of 12. Likewise, individuals without homeownership exhibit an
increase in the predicted value of social trust from 3.2 to 3.6 as income varies. These find-
ings indicate the presence of a disparity in perceptions of social trust between individuals
who own homes and those who do not, particularly in lower income brackets. However, as
income levels rise, this gap gradually diminishes and eventually becomes statistically insig-
nificant in higher income brackets.
Figure7(b) presents the marginal effect of homeownership on social trust, while consid-
ering the moderating influence of income. The binning estimator is employed to estimate
this effect. The graph demonstrates that as income, the moderator variable, rises, the mar-
ginal effect of homeownership on social trust diminishes. This pattern holds true across
all income groups and is statistically significant. The results depicted in Fig.7a are fur-
ther elucidated via Fig.7b, indicating that the statistical disparity in the marginal effect of
homeownership between the two groups diminishes in higher income brackets.
In conclusion, this analysis provides evidence supporting the positive relationship
between homeownership, perceived autonomy, and social trust. Consistent with the theo-
retical frameworks discussed, the findings demonstrate that homeownership enhances both
autonomy and social trust by providing economic stability and a sense of control over one’s
environment. However, the interaction between homeownership and income introduces a
crucial nuance: as income levels rise, the disparities in autonomy and social trust between
homeowners and non-owners diminish. This suggests that while homeownership plays a
more significant role in fostering autonomy and trust in lower-income contexts, its influ-
ence wanes as income increases, thereby supporting Hypothesis 2.
These findings emphasize the importance of considering income as a key moderat-
ing factor in the relationship between homeownership, autonomy, and social trust. While
homeownership is a significant determinant of perceived autonomy and social trust, its
impact is contingent upon the individual’s income level, highlighting the complex interplay
between economic resources and social outcomes. This underscores the need for a more
nuanced understanding of how financial composition and income stability shape individu-
als’ perceptions of autonomy and trust within society. Overall, the results contribute to a
deeper theoretical and empirical understanding of the dynamics between homeownership,
income, and social trust, with important implications for both economic and social policy.
6 Conclusion
In recent years, scholarly interest in the relationship between housing wealth and social and
political outcomes has grown, driven by expanding wealth inequalities in advanced capi-
talist nations since the 1980s, as well as shifts in labor markets and welfare state reforms.
While much of the existing research has focused on how housing wealth influences politi-
cal behavior, outcomes, and well-being, less attention has been given to the interplay
between homeownership, income, and their combined impact on social trust.
This study aims to explore the connection between homeownership and social trust.
Through path analysis, it assesses both the direct and indirect effects of homeownership on
social trust, with perceived autonomy acting as a mediator. Additionally, the study employs
Homeownership, Income andSocial Trust: Exploring Dynamics…
regression analyses to examine how the interaction between homeownership and income
influences both autonomy and social trust.
The initial analysis reveals that homeownership is positively associated with higher
levels of perceived autonomy, which in turn enhances social trust. This suggests a dual
mechanism: homeownership directly contributes to social trust and indirectly fosters trust
through its impact on perceived autonomy. In the subsequent analysis, income emerges as a
moderating factor in the relationship between homeownership, autonomy, and social trust.
As income rises, the disparities in autonomy and social trust between homeowners and
non-owners diminish. Notably, non-owners experience significant gains in both autonomy
and social trust as their income increases, narrowing the gap with homeowners. These find-
ings indicate that higher income levels can offset the disadvantages of non-homeowner-
ship, offering an alternative pathway to achieving similar levels of autonomy and trust.
The integrated results from these analyses clarify the interplay between homeownership,
income, autonomy, and social trust. The study demonstrates that while homeownership sig-
nificantly influences perceived autonomy and social trust, this effect weakens with higher
income levels, highlighting income’s critical moderating role. These findings deepen our
understanding of how housing wealth and income together shape individual perceptions,
with implications for social behavior and potential political outcomes. The research under-
scores the importance of considering both housing wealth and income in shaping attitudes
and behaviors, particularly regarding autonomy and trust.
Acknowledging the moderating role of income, the results underscore the critical impor-
tance of homeownership, particularly for individuals unable to significantly increase their
income amidst rising income insecurity driven by labor market shifts and welfare reforms.
In other words, when income growth is constrained, homeownership gains heightened sig-
nificance. This is particularly relevant in societies with pronounced disparities in home-
ownership, where real estate constitutes a substantial proportion of total assets and welfare
systems provide limited income-based support, such as in Korea. In these contexts, home-
ownership exerts a profound influence on individuals’ perceptions and behaviors within the
broader social framework.
Social trust is crucial in understanding the dynamics of homeownership and its impact
on social cohesion. It facilitates interaction and creates social capital within a society, fos-
tering cooperation and coordination among diverse groups, which reduces the costs associ-
ated with social control and promotes mutually beneficial relationships (Coleman, 1990;
Fukuyama, 1995; Putnam, 1993). Conversely, a lack of social trust can undermine confi-
dence in social relationships and erode trust in the political system, essential for sustaining
democracy (La Due Lake & Huckfeldt, 2002; Nannicini etal., 2013; Newton, 2001; Put-
nam, 2001; Schäfer, 2012). The polarization of homeownership, with significant disparities
between homeowners and non-owners, may adversely affect the development and endur-
ance of democratic systems.
Understanding that the societal benefits of widespread homeownership are most effec-
tively realized in environments where housing serves primarily as a residence and eco-
nomic inequalities are minimized is crucial. In such scenarios, social trust is more resilient,
contributing to overall social well-being and stability. This underscores the importance of
considering not only the prevalence of homeownership but also the purposes for which
homes are owned and the broader socioeconomic context.
While this study offers insights, several methodological and empirical limitations war-
rant careful consideration. First, the relationships identified in this analysis should be
interpreted with caution, as they do not necessarily imply causality. Although the find-
ings suggest a potential link between homeownership and social trust, the analysis does
S.Han
not conclusively demonstrate that homeownership influences these perceptions. Alternative
explanations must be considered. For instance, individuals living in areas with better living
conditions and higher homeownership rates may naturally experience fewer negative expo-
sures, which could influence social trust independently of homeownership itself.
Moreover, unobserved factors may contribute to the dynamics observed, potentially
making the relationship between homeownership and social trust appear spurious.
Broader macroeconomic conditions and housing market cycles could simultaneously
influence homeownership, income, and individual perceptions, complicating efforts to
isolate the specific impact of homeownership on social trust. The study also acknowl-
edges the possibility of reverse causality; regions with higher levels of social trust may
attract more homeowners, thereby influencing the study’s findings. While this research
focuses on the direction from homeownership to autonomy and social trust, future stud-
ies should explore the bidirectional nature of this relationship more thoroughly.
Another limitation is the study’s narrow focus on homeownership and income, which
may overlook other important factors influencing individual perspectives and behaviors,
such as income inequality, labor market conditions, unemployment risks, assets, and debts.
Future research should consider the dynamics among homeownership, house prices, hous-
ing debt, and income to fully understand their collective effects on social outcomes.
Additionally, this study did not incorporate variables related to policies such as
free housing and housing assistance for protected groups. Including these policy vari-
ables and their contexts might lead to different interpretations. However, simplifying
the model to focus on key variables—homeownership and income, as recommended by
Hünermund and Louw (2023)—helps to clarify the core findings.
Moving forward, it is essential for future research to explore the specific perceptions
influenced by homeownership within Korean and other societal frameworks, and to
investigate the broader social implications to deepen our understanding of this complex
relationship. While the findings are specific to Korea, they offer valuable insights for
comparative studies. The Korean case serves as a compelling example to examine how
historical, cultural, and economic trajectories can shape the relationship between home-
ownership and social trust. By drawing parallels and contrasts with other countries, the
study can contribute to a broader understanding of the varied ways in which homeown-
ership intersects with social trust in different socio-political contexts.
Supplementary Information The online version contains supplementary material available at https:// doi.
org/ 10. 1007/ s11205- 024- 03481-x.
Acknowledgements Not applicable
Funding: Not applicable.
Data Availability All data used in this study are shared at Harvard Dataverse (https:// doi. org/ 10. 7910/ DVN/
GBIGIO).
Declarations
Conflict of interest The author declared no potential conflicts of interest with respect to the research, author-
ship, and/or publication of this article.
Homeownership, Income andSocial Trust: Exploring Dynamics…
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