Intratemporal Substitution between Housing and Nondurable Consumption: Evidence from Reinvestment in Housing Stock

Natalia Khorunzhina

MPRA Paper from University Library of Munich, Germany

Abstract: I investigate empirically the intratemporal dependence between nondurable consumption and housing. Using the data on maintenance expenditures and self-assessed house value, I separate the measure of housing stock and house prices, and use these data for estimation of the model, which allows for testing whether consumption and housing are characterized by intratemporal nonseparability in the contemporaneous utility. I find evidence in favor of a substitution mechanism between housing and total nondurable consumption. A similar conclusion is reached for some separate consumption categories, such as food, transport, clothing, vacations, and entertainment.

Keywords: Housing; Nondurable Consumption; Intratemporal Nonseparability (search for similar items in EconPapers)
JEL-codes: C51 D12 D13 E21 R21 (search for similar items in EconPapers)
Date: 2018-08-26
New Economics Papers: this item is included in nep-mac and nep-ure
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