1. Residential satisfaction is determined by a mix of factors including both physical and social aspects of a person's housing and surrounding environment. 2. It indicates people's response to not just the physical residential setting, but also the social, economic, and institutional aspects. 3. Theories of residential satisfaction propose that it measures the differences between a household's actual and desired housing and neighborhood situations, based on factors like life stage and changing needs, discrepancies between current and desired conditions, and the cognitive construction of an ideal reference situation.