The incongruence between objective and subjective rental affordability: Does residential satisfaction matter?

Addressing the rental affordability problem requires defining and measuring ‘affordability’ accurately. A variety of objective and subjective indicators have been suggested to measure rental affordability. However, several studies demonstrated that objective and subjective measures of rental affordability are not well aligned with each other, and the underlying cause of this mismatch is unknown. Drawing on Noll's (2013) objective and subjective social indicator framework, this paper examines the extent to which the objectively and subjectively measured levels of rental affordability are incongruent and the driver of the disparity. Using the longitudinal data of the Labor and Income Panel Study in Korea (2015–2020), we conducted a series of panel multinominal logistic regressions with fixed effects. The results show that there is a significant mismatch between objective and subjective rental affordability, and this incongruence is partly due to residential satisfaction, which influences subjective rental affordability. The paper calls for more in-depth exploration of residential satisfaction to benefit refined and nuanced policies to address rental affordability problems.