Saving Behavior and Housing Wealth Evidence from German Micro Data

Gröbel Sören () and Ihle Dorothee ()
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Gröbel Sören: Institute of Spatial and Housing Economics, University of Muenster, Münster, Germany
Ihle Dorothee: Institute of Spatial and Housing Economics, University of Muenster, Münster, Germany

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2018, vol. 238, issue 6, 501-539

Abstract: Housing property is the most important position in a household’s wealth portfolio. Even though there is strong evidence that house price cycles and saving patterns behave synchronously, the underlying causes remain controversial. The present paper examines if there is a wealth effect of house prices on savings using household-level panel data from the German Socio-Economic Panel for the period 1996-2012. We find that young homeowners decrease their savings in response to unanticipated house price shocks, whereas old households hardly respond to house price changes. Although effects are relatively low in magnitude, we interpret this as evidence of a housing wealth effect.

Keywords: housing wealth; saving behavior; Germany (search for similar items in EconPapers)
JEL-codes: D91 E21 R31 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:238:y:2018:i:6:p:501-539:n:1

DOI: 10.1515/jbnst-2017-0118

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