Disentangling the Effect of Home Ownership on Household Stock-holdings: Evidence from Japanese micro data

Tokuo Iwaisako, Arito Ono, Amane Saito and Hidenobu Tokuda

No 77, HIT-REFINED Working Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: Using Japanese household micro survey data for the period 2000–2015, this study examines the effects of home ownership on household stock holdings. To disentangle the effect of housing assets (land value) and mortgage debt on a household’s portfolio of stocks as a share of their liquid financial assets, we apply the instrumental variable approach proposed by Chetty et al. (2017) that employs differences in average land price indices across housing markets in the year in which household portfolios are measured and those in the year in which the house was purchased. Our estimates suggest that an exogenous increase in land value (while holding mortgage debt constant) increases the portfolio of stocks, while an increase in mortgage debt (while holding land value constant) reduces it. We also find that an increase in land value and mortgage debt (while holding home equity constant) does not affect the portfolio of stocks, but increases the repayment of mortgage debt.

Keywords: housing; home equity; mortgage debt; portfolio choice (search for similar items in EconPapers)
JEL-codes: D14 G11 R21 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2018-03
New Economics Papers: this item is included in nep-ure
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https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/29136/wp077.pdf

Related works:
Journal Article: Disentangling the effect of home ownership on household stockholdings: Evidence from Japanese micro data (2022)
Working Paper: Disentangling the Effect of Home Ownership on Household Stock-holdings: Evidence from Japanese microdata (2019)
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