Do Europeans really feel better at home than in a nursing home?

The desire to age "in place" avoiding nursing homes seems universally acknowledged, and the recent COVID-19 pandemic may have encouraged it. Using data from the Survey of Health Ageing and Retirement in Europe (SHARE), we show that those living in nursing home declared a lower level of life satisfaction than those living in the community. Controlling for demographics, the difference was around -8% over an average score of 6.73/10. Adding controls for the economic situation, health and disability level the negative association becomes non-significant. Functional status seems to explain most of the difference in well-being between nursing and private homes. However, the selection into nursing home may be linked to unobservable characteristics. We tackle this causality issue in two ways. First by using propensity score matching methods. Living in a nursing home becomes associated with lower well-being. Finally, we make use of our longitudinal data to further reduce the potential impact of non-observables. The conclusions are globally reversed: living in a nursing home is associated with higher well-being. This is coherent with a model of optimal residential choices: living in a nursing home might not be desired but proves to be the best choice for those who make it.