An Approach for Housing Wealth Estimation: The Mexican Case
García Ana Laura,
González Juan Pedro and
No 2022-12, Working Papers from Banco de México
Housing is the greatest asset held by most households, and it is an important determinant of their financing and consumption decisions. Despite the fact that measuring housing wealth is crucial for understanding households' economic behavior, this indicator is currently unavailable in Mexico due to the lack of data commonly required for its estimation. This paper proposes a more flexible methodology, based on the quantity times price approach and the perpetual inventory method, that eases data requirements while still meeting international guidelines. Our results suggest housing wealth in Mexico has followed an upward trend as percentage of GDP since 2005, reaching around 187% and 202% of GDP in 2020. In addition, our measure enables the calculation of other popular indicators concerning households, such as housing equity and household total net worth.
Keywords: Housing; house hold wealth; perpetual inventory method; quantity times price approach (search for similar items in EconPapers)
JEL-codes: E21 E22 G51 O18 R2 R31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fdg and nep-ure
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