Abstract
There is strong evidence that house prices and consumption are synchronised. There is, however, disagreement over the causes of this link. This study examines if there is a wealth effect of house prices on consumption. Using a household-level panel data set with information about house ownership, income, wealth and demographics for a large sample of the Danish population in the period 1987-96, we model the dependence of the growth rate of total household expenditure with unanticipated innovations to house prices. Controlling for factors related to competing explanations, we find little evidence of a housing wealth effect.
| Original language | English |
|---|---|
| Journal | Economic Journal |
| Volume | 123 |
| Issue number | 568 |
| Pages (from-to) | 401-428 |
| Number of pages | 27 |
| ISSN | 0013-0133 |
| DOIs | |
| Publication status | Published - May 2013 |