The Effect of House Prices on Household Consumption in Italy

Riccardo Calcagno, Elsa Fornero and Mariacristina Rossi
Additional contact information
Riccardo Calcagno: VU - Vrije Universiteit Amsterdam [Amsterdam]
Elsa Fornero: UNITO - Università degli studi di Torino = University of Turin

Post-Print from HAL

Abstract: This paper studies the effect of a change in real estate wealth on the consumption behaviour of Italian households, using the Bank of Italy's Survey of Household Income and Wealth dataset. We relate annual household consumption to capital gains in housing, controlling for characteristics such as age. In line with the empirical predictions of our model, we find the oldest households - which are less affected by the higher costs of future rent - to be the most affected by increases in real net housing wealth. Younger households, on the other hand, are not significantly affected in their consumption decisions by house price increases. We also take into account the fact that benefiting from capital gains is conditional on owning housing wealth and estimate the different impacts of house price changes on the savings behaviours of both homeowners and renters. Our estimates suggest that house price increases raise consumption not only for homeowners but also for renters.

Date: 2009-10-01
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Published in Journal of Real Estate Finance and Economics, 2009, 39 (3), 284-300 p. ⟨10.1007/s11146-009-9187-x⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: The Effect of House Prices on Household Consumption in Italy (2009)
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:hal:journl:hal-02313021

DOI: 10.1007/s11146-009-9187-x

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().