Consumption Dynamics and a Home Purchase

Dongjae Jung ()
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Dongjae Jung: Economic Research Institute, Bank of Korea

No 2020-27, Working Papers from Economic Research Institute, Bank of Korea

Abstract: This paper investigates the effects of a home purchase, which is one type of durable expenditure, on changes in non-durable consumption at the household level. The results suggest that there is a break on the consumption path at the time of a home purchase; non-durable consumption in the after-period of a home purchase is 5.2% higher than the before-period. The results propose an extra path that connects the two cycles of housing markets and consumption by suggesting that home purchases trigger not only additional home-related durable spendings, but also release delayed consumption.

Keywords: Consumption; Home Purchase (search for similar items in EconPapers)
JEL-codes: D12 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2020-12-09
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