MPCs of ABCs: The housing wealth effect for affluent boomers with credit

Niloy Bose and Antu Panini Murshid

Economic Inquiry, 2025, vol. 63, issue 3, 945-960

Abstract: This paper combines exogenous variation in house prices with anonymized individual‐level expenditures data to identify a causal channel from housing wealth to consumption. We show that the Sandy Hook school shooting provided a large negative exogenous shock to local housing which lowered credit card spending by about 4.2 cents for each $1 fall in house prices: rescaled this translates to an annual marginal propensity to consume (MPC) of about 9 cents on the dollar. These consumption sensitivities are driven entirely by creditworthy middle‐aged consumers, with those closest to the retirement threshold reacting the strongest.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/ecin.13282

Related works:
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:bla:ecinqu:v:63:y:2025:i:3:p:945-960

Ordering information: This journal article can be ordered from
https://ordering.onl ... s.aspx?ref=1465-7295

Access Statistics for this article

Economic Inquiry is currently edited by Tim Salmon

More articles in Economic Inquiry from Western Economic Association International Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().