Home Price Expectations and Spending: Evidence from a Field Experiment

Felix Chopra, Christopher Roth and Johannes Wohlfart ()
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Johannes Wohlfart: University of Cologne, ECONtribute, MPI for Collective Goods Bonn, CEBI

No 233, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: We conduct a field experiment with US households to study how expectations about long-run home price growth shape spending decisions. In our survey, we exogenously vary these expectations by providing households with different expert forecasts. Linking the survey data with rich home-scanner data, we document that homeowners’ spending is inelastic to home price expectations. By contrast, renters reduce their spending when expecting higher home price growth. These findings reflect differences in the tendency to be a future net buyer of housing across the two groups. Our study highlights consequences of asset price growth for consumption inequality.

Keywords: Consumption; Home prices; Expectations; Information; Homeowner; Renter (search for similar items in EconPapers)
JEL-codes: C93 D14 D83 D84 G51 (search for similar items in EconPapers)
Pages: 73 pages
Date: 2023-05
New Economics Papers: this item is included in nep-exp and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_233_2023.pdf Second version, 2024 (application/pdf)

Related works:
Working Paper: Home Price Expectations and Spending: Evidence from a Field Experiment (2023)
Working Paper: Home Price Expectations and Spending: Evidence from a Field Experiment (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:233

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