Real estate market and consumption: macro and micro evidence of Japan

Kazuo Ogawa

Chapter 1 in Handbook of Real Estate and Macroeconomics, 2022, pp 2-20 from Edward Elgar Publishing

Abstract: This study is an empirical investigation into the relationship between the real estate market and consumption in Japan. The purpose of this study is twofold. First, we investigate the channel through which the performance of the real estate market affects consumption. Using the quarterly time series data, we estimate the VAR model to pin down the transmission mechanism of land price to consumption. We find that collateral channel played an important role in propagating a shock in land price to consumption in the bubble period and the lost decades. Second, we estimate the effect of housing wealth on consumption, using the panel data of the Japan Household Panel Survey from 2009 to 2017. We find that collateral channel is still at work for young households. Our estimates of marginal propensity to consume out of housing wealth is 0.0097 to 0.0146, slightly larger than the estimates in the previous studies.

Keywords: Asian Studies; Economics and Finance; Urban and Regional Studies (search for similar items in EconPapers)
Date: 2022
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Working Paper: Real Estate Market and Consumption: Macro and Micro Evidence of Japan (2020)
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