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The Effect of the Proportions of Housing Wealth and Financial Wealth on Consumption

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This note offers a theoretical model to prove that the proportions of housing wealth and financial wealth may play a key role in estimating and analyzing the marginal propensities to consume (MPCs) out of housing wealth and financial wealth and analyzing the effects of volatilities on both MPCs. Additional interesting result is that the higher proportions of housing wealth and financial wealth reduce the certainty effect of the preference for housing wealth.

Abstract

This note offers a theoretical model to prove that the proportions of housing wealth and financial wealth may play a key role in estimating and analyzing the marginal propensities to consume (MPCs) out of housing wealth and financial wealth and analyzing the effects of volatilities on both MPCs. Additional interesting result is that the higher proportions of housing wealth and financial wealth reduce the certainty effect of the preference for housing wealth.

참고문헌 (19)

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  11. Housing and equity wealth effects of Italian households, "Grant, C.", European Central Bank, ~ (2008)
  12. Muellbauer, J. N., "Housing, credit and consumer expenditure", Proceedings – Economic Policy Symposium –, pp.267~334 (2007)
  13. Skinner, J., "Housing Prices and Aggregate Saving", Regional Science and Urban Economics, 19, pp.305~324 (1989)
  14. Smith, W., "Risk, the spirit of capitalism and growth : The implications of a preference for capital", Journal of Macroeconomics, 21(2), pp.241~262 (1999)
  15. Smith, W., "Can the desire to conserve our natural resources be self-defeating?", Journal of Environmental Economics and Management, 49(1), pp.52~67 (2005)
  16. Son, Y. S., "The effect of the preference for housing wealth on consumption", Global Business and Finance Review, 2011(Fall), pp.167~176 (2011)
  17. Sousa, R. M., "Financial wealth, housing wealth, and consumption", International Research Journal of Finance and Economics, 19, pp.167~191 (2008)
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