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The Effect of Housing on Portfolio Choice: A Reappraisal Using French Data

Fougère, Denis and Poulhès, Mathilde
Authors registered in the RePEc Author Service: Denis Fougere

No 9213, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Chetty and Szeidl (2012) propose to estimate the effect of housing on portfolio choice by distinguishing between the effect of mortgage debt and the effect of home equity and by endogenizing these two variables. When replicating their study with French data, we obtain similar qualitative results: an increase in mortgage debt(respectively, in home equity) reduces (respectively, raises) stockholding. However, while in the US the wealth effect of holding more home equity is cancelled out by the risk effect of owning a more expensive house, in France the wealth effect dominates the risk effect. We propose some explanations for this discrepancy.

Keywords: Housing; Mortgage debt; Portfolio choice; Property value (search for similar items in EconPapers)
JEL-codes: C36 D14 G11 R21 (search for similar items in EconPapers)
Date: 2012-11
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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