 House prices, homeownership, and household consumption: Evidence from household panel data in KoreaSeungyoon Lee Economic Modelling, 2023, vol. 126, issue C Abstract: Using Korean household panel data, this paper investigates the impact of house price changes on household consumption, focusing on asymmetric responses across homeownership status and the direction of house price fluctuations. I find that rising house prices have little influence on household consumption, whereas a decrease in house prices brings about a substantial impact. Falling house prices reduce homeowners’ consumption and raise renters’ consumption, implying that the opposing pressures on two household groups could substantially offset each other. The responses are found to be asymmetric across several aspects of household heterogeneities. Owners of multiple houses or relatively larger residences and older owners show greater responses. In response to rising house prices, homeowners with loan-to-value ratios at the standard cutoff level for a home equity line of credit substantially increase their consumption. Several pieces of evidence support the operation of the wealth effect and collateral effect channels. Keywords: House price; Household consumption; Wealth effect; Collateral effect; Household panel data (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:126:y:2023:i:c:s0264999323001670 DOI: 10.1016/j.econmod.2023.106355 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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