Wealth Inequality and Homeownership in Europe

Leo Kaas, Georgi Kocharkov and Edgar Preugschat

No 5498, CESifo Working Paper Series from CESifo

Abstract: The recently published Household Finance and Consumption Survey has revealed large differences in wealth inequality between the countries of the Euro area. We find a strong negative correlation between wealth inequality and homeownership rates across countries. We use two decomposition methods to shed more light on this correlation. First, a Gini decomposition by homeownership status shows that the negative relationship is mostly driven by large between-group inequality across owners and renters. Second, to control for other observables, we conduct a detailed counterfactual decomposition of crosscountry inequality differences. We confirm the major role for homeownership rates in accounting for the wealth inequality differences. Our analysis suggests that the cross-country variation is mostly driven by differences in the savings behavior of households in the bottom half of the wealth distribution and that those differences in savings are to a large extent channeled through housing wealth.

Keywords: wealth inequality; homeownership; housing; Euro area (search for similar items in EconPapers)
JEL-codes: D31 E21 G11 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Wealth Inequality and Homeownership in Europe (2019)
Working Paper: Wealth Inequality and Homeownership in Europe (2015)
Working Paper: Wealth Inequality and Homeownership in Europe (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_5498

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