How Do House Prices Affect Consumption Patterns Across Categories?

Wonhyeok Kim, Soohyung Lee and Yoonsoo Lee ()
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Wonhyeok Kim: Korea Enterprises Federation
Soohyung Lee: Seoul National University

Korean Economic Review, 2021, vol. 37, 367-398

Abstract: This study examines the extent to which house prices may affect consumption patterns across categories. For this purpose, we merge house price data with transaction data between 2012 and 2016, provided by a major credit card company in South Korea. We find a positive relationship between house prices and overall consumption, but great heterogeneity across consumption categories. Results imply that the change in house price accounts for 25% of the change in total consumption. Moreover, such effects of house price change quantitatively vary by consumption categories, from 0.15% to 46.08%.

Keywords: House Price; Consumption Category; Wealth Effect; Role of Debt (search for similar items in EconPapers)
JEL-codes: D12 E21 E31 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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