Housing Wealth Effects in Japan: Evidence Based on Household Micro Data

Masahiro Hori and Takeshi Niizeki

ESRI Discussion paper series from Economic and Social Research Institute (ESRI)

Abstract: Using micro data covering almost 500,000 Japanese households over the period 1983-2012, this paper examines to what extent household consumption responds to changes in housing wealth. Instead of employing self-reported or regionally averaged values of housing wealth, we directly estimate the housing wealth of individual households by matching several official statistics, providing an ideal setting to identify housing wealth effects on consumption. Employing cross-section and pseudo-panel based regressions, we find that the marginal propensity to consume (MPC) out of housing wealth is approximately 0.0008-0.0013 for nondurable consumption and 0.0059-0.0082 for total consumption. We further find that the consumption response of older households is larger than that of younger households, which is consistent with the pure wealth effects hypothesis.

Pages: 31 pages
Date: 2017-09
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Housing Wealth Effects in Japan: Evidence Based on Household Micro Data (2019)
Working Paper: Housing Wealth Effects in Japan: Evidence Based on Household Micro Data (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:esj:esridp:339

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