Housing Market Gains and Consumer Spending

John Quigley

ERES from European Real Estate Society (ERES)

Abstract: "Worries about ""irrational exuberance"" in stock prices have renewed interest in the linkage between measures of wealth and consumer spending. In particular, unrealized capital gains in the stock market and also in the housing market may have substantially affected consumer spending, amplifying the recent expansion and perhaps increasing the danger of recession. The paper combines an analysis of U.S. states with one focussing on the international experience during the past three decades. It estimates the effect of housing wealth and stock market inflation of asset prices upon consumer spending for US states and for EU countries. We estimate simple models of consumption behavior adding measures of the unrealized capital gains in housing. The results for both the U.S. and for Europe indicate a strong relationship between capital gains in housing and consumer spending. If anything, the results are stronger for housing wealth than for stock market wealth."

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2001-06-01
References: Add references at CitEc
Citations:

Downloads: (external link)
https://eres.architexturez.net/doc/oai-eres-id-eres2001-260 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2001_260

Access Statistics for this paper

More papers in ERES from European Real Estate Society (ERES) Contact information at EDIRC.
Bibliographic data for series maintained by Architexturez Imprints ().