Comparing Wealth Effects: The Stock Market versus the Housing Market

Karl E. Case (), John M. Quigley () and Robert J. Shiller ()

No 1335, Cowles Foundation Discussion Papers from Cowles Foundation, Yale University

Abstract: We examine the link between increases in housing wealth, financial wealth, and consumer spending. We rely upon a panel of 14 countries observed annually for various periods during the past 25 years and a panel of U.S. states observed quarterly during the 1980s and 1990s. We impute the aggregate value of owner-occupied housing, the value of financial assets, and measures of aggregate consumption for each of the geographic units over time. We estimate regressions relating consumption to income and wealth measures, finding a statistically significant and rather large effect of housing wealth upon household consumption.

Keywords: Consumption; nonfinancial wealth; housing market; real estate (search for similar items in EconPapers)
JEL-codes: E2 G1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ent and nep-net
Date: 2001-10
Note: CFP 1055.
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Published in Advances in Macroeconomics (2005) 5(1): 1–34

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Related works:
Working Paper: Comparing Wealth Effects: The Stock Market versus The Housing Market (2001)
Working Paper: Comparing Wealth Effects: The Stock Market Versus the Housing Market (2001)
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