Financial and Housing Wealth, Expenditures and the Dividend to Ownership
Sheng Guo () and
William G. Hardin ()
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Sheng Guo: Florida International University
William G. Hardin: Florida International University
The Journal of Real Estate Finance and Economics, 2017, vol. 54, issue 1, 58-96
Abstract For a household, home ownership provides necessary shelter, potential investment returns associated with property appreciation and a hedge against increased housing related cash outlays. In addition to potential appreciation, individual households benefit over time from a housing dividend defined as the difference between the market rent for the individual household’s housing unit and the household’s actual house ownership costs. The purchase of a house can substantially fix a household’s recurring housing related expenditures and generates a hedge (implied housing dividend) that increases with ownership tenure. This expenditure hedge (dividend) to home ownership is documented using pooled, cross-year samples from the Consumer Expenditure Survey (CEX). The housing dividend delivers a non-trivial effect on household non-housing expenditures after controlling for housing value, housing equity, financial assets and income.
Keywords: Housing; Imputed rent; Consumption; Wealth effect; Expenditure; Dividend (search for similar items in EconPapers)
JEL-codes: D11 D12 G14 R21 R31 (search for similar items in EconPapers)
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