Does Housing Wealth Affect Consumption? The Case of Cyprus
Nektarios Michail and
George Thucydides
No 2018-3, Working Papers from Central Bank of Cyprus
Abstract:
In this paper we investigate the relationship between housing wealth and consumption in Cyprus. To this end, we employ a vector error correction mechanism to examine interlinkages among house prices, private consumption, disposable income, financial assets and financial liabilities. We find that house prices affect private consumption, particularly in the short term, albeit to a lesser extent than similar studies for other countries. Financial liabilities are found to be important for consumption behaviour, while financial assets of Cypriot households appear to not affect significantly their consumption. Distinguishing consumption between durable and non-durable goods, we find that an increase in house prices boosts consumption of durables, while non-durables are found to register an insignificant effect.
Keywords: House prices; consumption; VECM analysis (search for similar items in EconPapers)
JEL-codes: C1 C32 E21 R30 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2018-07
New Economics Papers: this item is included in nep-eff and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)
Downloads: (external link)
https://www.centralbank.cy/images/media/pdf/Workin ... -and-consumption.pdf (application/pdf)
Related works:
Journal Article: Does Housing Wealth Affect Consumption? The Case of Cyprus (2018) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:cyb:wpaper:2018-3
Access Statistics for this paper
More papers in Working Papers from Central Bank of Cyprus Contact information at EDIRC.
Bibliographic data for series maintained by Anna Markidou ().