Wealth, Composition, Housing, Income and Consumption

Sheng Guo and William Hardin

The Journal of Real Estate Finance and Economics, 2014, vol. 48, issue 2, 243 pages

Abstract: The present research covering the latest residential boom and bust cycle highlights the lack of uniform or constant time invariant wealth, housing and income relations. More important, wealth composition is shown to be a significant determinant of consumption. The marginal effects of housing equity, financial wealth and income differ substantially based on the composition of household wealth. Households with the highest percentage of net worth in financial assets have much lower income effects, have substantially higher marginal effects associated with stock holdings and have housing equity effects that differ noticeably from other households. Income effects for groups with the smallest amounts of relative financial wealth are dramatically higher than for households with greater financial wealth. Wealth and its composition affect consumption. Copyright Springer Science+Business Media, LLC 2014

Keywords: Consumption; Income; Wealth composition; Wealth effect; Housing effect; G10; G11; G12; G14; E31 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (11)

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Working Paper: Wealth, Composition, Housing, Income, and Consumption (2012)
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DOI: 10.1007/s11146-012-9390-z

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