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Wealth effects on consumption across the wealth distribution: empirical evidence

Frédérique Savignac, Luc Arrondel () and Pierre Lamarche

No 1817, Working Paper Series from European Central Bank

Abstract: This paper studies the heterogeneity of the marginal propensity to consume out of wealth using French household surveys. We find decreasing marginal propensity to consume out of wealth across the wealth distribution for all net wealth components. The marginal propensity to consume out of financial assets tends to be higher compared with the effect of housing assets, except in the top of the wealth distribution. Consumption is less sensitive to the value of the main residence than to other housing assets. We also investigate the heterogeneity arising from indebtedness and from the role of housing assets as collateral. JEL Classification: D12, E21, C21

Keywords: consumption; household survey; Marginal propensity to consume out of wealth; Policy distributive effects (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ure
Date: 2015-06
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Related works:
Working Paper: Wealth Effects on Consumption across the Wealth Distribution: Empirical Evidence (2015) Downloads
Working Paper: Wealth Effects on Consumption across the Wealth Distribution: Empirical Evidence (2015) Downloads
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