Jump to ContentJump to Main Navigation
Show Summary Details
More options …

The B.E. Journal of Macroeconomics

Editor-in-Chief: Cavalcanti, Tiago / Kambourov, Gueorgui

Ed. by Abraham, Arpad / Carceles-Poveda , Eva / Debortoli, Davide / Lambertini, Luisa / Nimark, Kristoffer / Wang, Pengfei

2 Issues per year


IMPACT FACTOR 2017: 0.378
5-year IMPACT FACTOR: 0.462

CiteScore 2017: 0.62

SCImago Journal Rank (SJR) 2017: 0.553
Source Normalized Impact per Paper (SNIP) 2017: 0.605

Online
ISSN
1935-1690
See all formats and pricing
More options …

What Drives Personal Consumption? The Role of Housing and Financial Wealth

Jiri Slacalek
Published Online: 2009-10-01 | DOI: https://doi.org/10.2202/1935-1690.1555

I investigate the effect of wealth on consumption in a new dataset with financial and housing wealth from 16 countries. The baseline estimation method based on the sluggishness of consumption growth implies that the eventual (long-run) marginal propensity to consume out of total wealth is 5 cents (averaged across countries). While the wealth effects are quite strong--between 4 and 6 cents--in countries with more developed mortgage markets and in market-based, Anglo-Saxon and non euro area economies, consumption only barely reacts to wealth elsewhere. The effect of housing wealth is somewhat smaller than that of financial wealth for most countries, but not for the U.S. and the UK. The housing wealth effect has risen substantially after 1988 as it has become easier to borrow against housing wealth.

Keywords: housing prices; wealth effect; consumption dynamics

About the article

Published Online: 2009-10-01


Citation Information: The B.E. Journal of Macroeconomics, Volume 9, Issue 1, ISSN (Online) 1935-1690, DOI: https://doi.org/10.2202/1935-1690.1555.

Export Citation

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston.Get Permission

Citing Articles

Here you can find all Crossref-listed publications in which this article is cited. If you would like to receive automatic email messages as soon as this article is cited in other publications, simply activate the “Citation Alert” on the top of this page.

[1]
Luc Arrondel, Pierre Lamarche, and Frédérique Savignac
European Economic Review, 2018
[2]
Maral Kichian and Milana Mihic
Canadian Journal of Economics/Revue canadienne d'économique, 2018, Volume 51, Number 3, Page 784
[3]
Alberto Botta, Eugenio Caverzasi, and Daniele Tori
Macroeconomic Dynamics, 2018, Page 1
[4]
Yener Coskun, Burak Sencer Atasoy, Giacomo Morri, and Esra Alp
International Journal of Financial Studies, 2018, Volume 6, Number 2, Page 57
[5]
Meagan McCollum and Gregory B. Upton
Applied Economics Letters, 2017, Page 1
[6]
Eddie C.M. Hui, Xian Zheng, and Wen‐juan Zuo
Property Management, 2012, Volume 30, Number 5, Page 435
[7]
Yu-Fu Chen, Michael Funke, and Aaron Mehrotra
Pacific Economic Review, 2017, Volume 22, Number 3, Page 383
[8]
Sheng Guo and William G. Hardin
The Journal of Real Estate Finance and Economics, 2017, Volume 54, Number 1, Page 58
[9]
Miguel Ampudia, Akmaral Pavlickova, Jiri Slacalek, and Edgar Vogel
Journal of Policy Modeling, 2016, Volume 38, Number 1, Page 181
[10]
Ray Barrell, Mauro Costantini, and Iris Meco
International Review of Financial Analysis, 2015, Volume 42, Page 316
[11]
JANINE ARON, JOHN V. DUCA, JOHN MUELLBAUER, KEIKO MURATA, and ANTHONY MURPHY
Review of Income and Wealth, 2012, Volume 58, Number 3, Page 397
[12]
Bas Bakker and Joshua Felman
IMF Working Papers, 2014, Volume 14, Number 225, Page 1
[13]
Orazio Attanasio, Andrew Leicester, and Matthew Wakefield
Journal of the European Economic Association, 2011, Volume 9, Number 3, Page 399
[14]
CHRISTOPHER D. CARROLL, MISUZU OTSUKA, and JIRI SLACALEK
Journal of Money, Credit and Banking, 2011, Volume 43, Number 1, Page 55
[15]
Daniel Cooper and Karen Dynan
Journal of Economic Surveys, 2016, Volume 30, Number 1, Page 34
[16]
Beatrice D. Simo-Kengne, Rangan Gupta, and Manoel Bittencourt
Housing Studies, 2013, Volume 28, Number 8, Page 1133
[17]
Janine Aron and John Muellbauer
Review of Income and Wealth, 2013, Volume 59, Page S161
[18]
Christopher W. Anderson and Eli Beracha
The Journal of Real Estate Finance and Economics, 2012, Volume 45, Number 2, Page 326
[19]
Riccardo De Bonis and Andrea Silvestrini
Applied Financial Economics, 2012, Volume 22, Number 5, Page 409

Comments (0)

Please log in or register to comment.
Log in