House Price Shocks and Household Savings: evidence from Dutch administrative data

Nancy van Beers, Michiel Bijlsma and Remco Mocking

No 299, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: We study the effect of house price shocks on the savings behaviour of Dutch homeowners over the period 2006-2011. Using unique administrative data, we build a balanced panel of slightly less than 2 million Dutch home owning households, containing information on house values, wealth, income and other background characteristics. We find a negative relationship between house price changes and savings, with the largest effects for young households with negative housing equity. In our baseline specification, we find larger effects for house price increases compared to house price decreases. Households of age 30 with loan-to-value ratios above one, save roughly 3 euro less for a 100 euro increase in house prices, while they save around 1 euro more for a 100 euro decrease. The asymmetric effect of price declines versus increases holds in most, but not all specifications.

JEL-codes: G12 R11 R21 R31 R52 (search for similar items in EconPapers)
Date: 2015-01
New Economics Papers: this item is included in nep-eur and nep-ure
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Citations: View citations in EconPapers (10)

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