Housing Equity Withdrawal and Consumption Dynamics in Estonia 2002-2011
Merike Kukk and
Karsten Staehr ()
Additional contact information
Madis Aben: Ministry of Finance, Estonia
Research in Economics and Business: Central and Eastern Europe, 2012, vol. 4, issue 1
The linkages between housing wealth and household consumption are contentious. This paper uses a recently introduced statistical concept, housing equity withdrawal (HEW), to investigate the linkages in the case of Estonia. HEW is defined as net borrowing by the household sector, which is secured on housing equity but not invested in housing assets. HEW is thus a direct measure of the cash flow from housing assets available to the household sector. The HEW series computed for Estonia are much more volatile than similar series in countries such as the UK and the USA. The volatility is related to rapidly changing financing conditions and real estate prices, but also to consumption aspirations. Econometric analysis confirms a close correlation between housing equity withdrawal and consumption, but the relation appears to differ between the boom in 2002-2007 and the downturn period 2008-2011.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ttu:rebcee:3
Access Statistics for this article
More articles in Research in Economics and Business: Central and Eastern Europe from Tallinn School of Economics and Business Administration, Tallinn University of Technology Contact information at EDIRC.
Bibliographic data for series maintained by Anneli Kalm ().