Housing Wealth Effects
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Housing Wealth Effects
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Author : Adam M. Guren
language : en
Publisher:
Release Date : 2018
Housing Wealth Effects written by Adam M. Guren and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with Consumer behavior categories.
We provide new, time-varying estimates of the housing wealth effect back to the 1980s. We exploit systematic differences in city-level exposure to regional house price cycles to instrument for house prices. Our main findings are that: 1) Large housing wealth effects are not new: we estimate substantial effects back to the mid 1980s; 2) Housing wealth effects were not particularly large in the 2000s; if anything, they were larger prior to 2000; and 3) There is no evidence of a boom-bust asymmetry. We compare these findings to the implications of a standard life-cycle model with borrowing constraints, uninsurable income risk, illiquid housing, and long-term mortgages. The model explains our empirical findings about the insensitivity of the housing wealth effects to changes in the loan-to-value (LTV) distribution, including the dramatic rise in LTVs in the Great Recession. The insensitivity arises in the model for two reasons. First, impatient low-LTV agents have a high elasticity. Second, a rightward shift in the LTV distribution increases not only the number of highly sensitive constrained agents but also the number of underwater agents whose consumption is insensitive to house prices.
Analyzing The Effects Of Financial And Housing Wealth On Consumption Using Micro Data
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Author : Carlos Caceres
language : en
Publisher: International Monetary Fund
Release Date : 2019-05-24
Analyzing The Effects Of Financial And Housing Wealth On Consumption Using Micro Data written by Carlos Caceres and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-05-24 with Business & Economics categories.
This paper analyzes the existence of “wealth effects” derived from net equity (in the form of housing, financial assets, and total net worth) on consumption. The study uses longitudinal household-level data?from the Panel Study of Income Dynamics (PSID) ?covering about 7,000-9,000 households in the U.S., with the estimations carried over the period 1999-2017. Overall, wealth effects are found to be relatively large and significant for housing wealth, but less so for other types of wealth, including stocks. Furthermore, the analysis shows how these estimated marginal propensities to consume (MPC) from wealth are closely linked to household characteristics, including income and demographic factors. Finally, underlying structural changes in household characteristics point to potentially lower aggregate MPCs from wealth going forward.
Housing Wealth Effects
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Author : Eric S. Belsky
language : en
Publisher:
Release Date : 2004
Housing Wealth Effects written by Eric S. Belsky and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Consumer behavior categories.
The Housing Wealth Effect
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Author : Charles W. Calomiris
language : en
Publisher:
Release Date : 2012
The Housing Wealth Effect written by Charles W. Calomiris and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with Economics categories.
"Current estimates of housing wealth effects vary widely. We consider the role of omitted variables suggested by economic theory that have been absent in a number of prior studies. Our estimates take into account age composition and wealth distribution (using poverty rates as a proxy), as well as wealth shares (how much of total wealth is comprised of housing vs. stock wealth). We exploit cross-state variation in housing, stock wealth and other variables in a newly assembled panel data set and find that the impact of housing on consumer spending depends crucially on age composition, poverty rates, and the housing wealth share. In particular, young people who are more likely to be credit-constrained, and older homeowners, likely to be "trading down" on their housing stock, experience the largest housing wealth effects, as suggested by theory. Also, as suggested by theory, housing wealth effects are higher in state-years with higher housing wealth shares, and in state-years with higher poverty rates (likely reflecting the greater importance of credit constraints for those observations). Taking these various factors into account implies huge variation over time and across states in the size of housing wealth effects"--National Bureau of Economic Research web site
How Large Is The Housing Wealth Effect
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Author : Chris Carroll
language : en
Publisher:
Release Date : 2006
How Large Is The Housing Wealth Effect written by Chris Carroll and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with Consumption (Economics) categories.
This paper presents a simple new method for estimating the size of 'wealth effects' on aggregate consumption. The method exploits the well-documented sluggishness of consumption growth (often interpreted as 'habits' in the asset pricing literature) to distinguish between short-run and long-run wealth effects. In U.S. data, we estimate that the immediate (next-quarter) marginal propensity to consume from a $1 change in housing wealth is about 2 cents, with a final long-run effect around 9 cents. Consistent with several recent studies, we find a housing wealth effect that is substantially larger than the stock wealth effect. We believe that our approach is preferable to the currently popular cointegration- based estimation methods, because neither theory nor evidence justifies faith in the existence of a stable cointegrating vector.
Feeling Rich Feeling Poor Housing Wealth Effects And Consumption In Europe
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Author : Mr. Serhan Cevik
language : en
Publisher: International Monetary Fund
Release Date : 2023-12-08
Feeling Rich Feeling Poor Housing Wealth Effects And Consumption In Europe written by Mr. Serhan Cevik and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-12-08 with Business & Economics categories.
Households across Europe are struggling with a double crisis—the worst inflation shock since the World War II and a sudden correction in house prices. There is a rich literature on how housing price cycles affect consumer spending, finding mixed results with a wide range of consumption responses to changes in housing wealth. In this paper, using quarterly data on 20 countries in Europe over the period 1980–2023, we analyze the dynamic relationship between inflation-adjusted housing wealth and consumer spending and obtain statistically significant and economically intuitive results. Household consumption responds positively and swiftly to changes in real house prices and gross disposable income as expected. Using the estimated coefficients, we can deduce that the average quarter-on-quarter decline of -1.96 percent in real house prices in the first quarter of 2023 in Europe could dampen consumer spending by about -0.51 percentage points in real terms on a cumulative basis over a horizon of eight quarters.
Housing Wealth Effects
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Author : Evelyn Gatawa
language : en
Publisher:
Release Date : 2008
Housing Wealth Effects written by Evelyn Gatawa and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with Consumer behavior categories.
Financial Market And Housing Wealth Effects On Consumption
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Author : Arnold C S. Cheng
language : en
Publisher:
Release Date : 2008
Financial Market And Housing Wealth Effects On Consumption written by Arnold C S. Cheng and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with categories.
The objective of this study is to examine the financial market and housing wealth effects on consumption. Housing has the dual functions as both a commodity yielding a flow of housing services and an investment asset yielding a flow of capital income. The findings from this study suggest that a rise in housing price has both a positive wealth effect and a negative price effect on consumption. While the positive wealth effect is caused by an increase in capital income, the negative price effect is caused by an increase in the cost of housing services. In addition, the housing market wealth effect increases, at the expense of the price effect, with the levels of leverage and homeownership of the housing market. These findings imply that the government policy of land supply aiming to stimulate the economy should strike a balance between the possible wealth and price effects of the housing market.
The Wealth Effects Of Housing Assets
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Author : Seog Jun Song
language : en
Publisher:
Release Date : 2005
The Wealth Effects Of Housing Assets written by Seog Jun Song and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Consumption (Economics) categories.
Comparing Wealth Effects
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Author : Karl E. Case
language : en
Publisher:
Release Date : 2001
Comparing Wealth Effects written by Karl E. Case and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Assets (Accounting). categories.
We examine the link between increases in housing wealth, financial wealth, and consumer spending. We rely upon a panel of 14 countries observed annually for various periods during the past 25 years and a panel of U.S. states observed quarterly during the 1980s and 1990s. We impute the aggregate value of owner-occupied housing, the value of financial assets, and measures of aggregate consumption for each of the geographic units over time. We estimate regressions relating consumption to income and wealth measures, finding a statistically significant and rather large effect of housing wealth upon household consumption