EconPapers    
Economics at your fingertips  
 

Consumption and Savings of First Time House Owners: How Do They Deal with Adverse Income Shocks?

João Ejarque and Søren Leth-Petersen
Additional contact information
João Ejarque: University of Essex

No 2008-08, CAM Working Papers from University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics

Abstract: We characterize savings behavior around the point of the first house purchase. Using a panel data set with income and wealth information on Danish first-time house owners we document that households save for the down payment, mortgage to the limit, run down liquid assets at purchase, and adjust to adverse income shocks occurring just after the purchase by reducing consumption. We build a model that replicates these observations, show that the preference parameters are identified from the data, and estimate them. Based on the estimated model house buying significantly reduces the ability to smooth adverse income shocks.

Pages: 23 pages
Date: 2008-11
New Economics Papers: this item is included in nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.econ.ku.dk/cam/wp0910/wp0708/2008-08.pdf/ (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.econ.ku.dk/cam/wp0910/wp0708/2008-08.pdf/ [301 Moved Permanently]--> https://www.econ.ku.dk/cam/wp0910/wp0708/2008-08.pdf/)

Related works:
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:kud:kuieca:2008_08

Access Statistics for this paper

More papers in CAM Working Papers from University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics �ster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Hoffmann ().

 
Page updated 2022-01-27
Handle: RePEc:kud:kuieca:2008_08