Housing Wealth, Stock Market Wealth and Consumption: A Panel Analysis for Australia

Nikola Dvornak and Marion Kohler

The Economic Record, 2007, vol. 83, issue 261, 117-130

Abstract: Using a panel of Australian States, we estimate how changes in household wealth affect consumption expenditure. Both housing and stock market wealth have a significant effect on consumption: a permanent $A1 increase in stock market wealth increases long‐run annual consumption by 6–9 cents; the same increase in housing wealth increases annual consumption by around 3 cents. With households’ housing assets more than three times that of stock market assets, a 1 per cent increase in housing wealth has an effect on consumption at least as large as that of a 1 per cent increase in stock market wealth.

Date: 2007
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https://doi.org/10.1111/j.1475-4932.2007.00388.x

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Working Paper: Housing Wealth, Stock Market Wealth and Consumption: A Panel Analysis for Australia (2003)
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