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What is the difference between these sentences below in terms of meaning?
He lives by himself.
He lives on his own
If you ask me, the first sentence connotes that he doesn't have a housemate/wife, like being alone at home .The second sentence connotes that he doesn't have girlfriend/boyfriend or friends/family who support him when he needs, like feeling lonely.
They can be somewhat interchanged; that is, they have similar meanings that in some contexts are equivalent, but in others they have a different connotation.
"living by himself" tends towards meaning without anyone in the same house.
He finished college where he shared a small apartment with three guys and found a loft apartment just a few blocks from his job. With his parent's support, He's living by himself and prefers it that way.
"living on his own" tends towards meaning without requiring support.
After living with his parents most of his life with his mother doing his laundry and cooking his meals, he finally moved out and started living on his own. He does his own laundry and cooks his own food, but he shares an apartment with a co-worker.
These examples show where one phrase works but the other doesn't.
I think the connotation you are looking for really depends on the context of these sentences. Neither one has a strong enough connotation on its own to make the assumption you are about what it implies.
For example, compare:
He lives by himself now. He can do what he wants when he pleases. There is no one to tell him when to eat, when to sleep. For the first time in his life, he has privacy and he loves it.
with
His wife left in January. He lives by himself now. For the first few months, he secretly cried every night. Even now, sometimes he comes home to the cold, dark house and wonders where it all went wrong.
The sentence works in either context. Likewise, living on his own could very well be positive:
Shortly after he started walking as a toddler, he was diagnosed with autism. His parents were sure he'd never be able to live independently, but after years of successful therapy, he lives on his own. They are so proud of him.
The context is really going to affect how you interpret either of these sentences.
