 Housing boom and non-housing consumption: evidence from urban households in ChinaEmpirical Economics, 2021, vol. 61, issue 6, No 11, 3313 pages Abstract: Abstract We study the response of non-housing consumption to housing price movements in urban China, which has been witnessing a real estate boom ever since 2003. Using Urban Household Survey data, we estimate an elasticity of consumption with respect to housing price of 0.06–0.07 for homeowners. Moreover, we find that the average marginal propensity to consume out of housing wealth is 0.025–0.03. We employ a novel instrumental variable associated with higher-education expansion to ensure that these estimates are causal effects. As for renters, we show that their consumption response to housing shocks is insignificant. We further reveal that the marginal propensity to consume is larger for homeowners who are more credit constrained. Keywords: Consumption; Housing prices; Wealth effect; Collateral constraint (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:spr:empeco:v:61:y:2021:i:6:d:10.1007_s00181-020-02008-w Ordering information: This journal article can be ordered from DOI: 10.1007/s00181-020-02008-w Access Statistics for this article Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund More articles in Empirical Economics from Springer |
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