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Housing consumption and macroprudential policies in Europe: An ex ante evaluation

Qizhou Xiong and Antonios Mavropoulos

No 17/2018, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: In this paper, we use the panel of the first two waves of the Household Finance and Consumption Survey by the European Central Bank to study housing demand of European households and evaluate potential housing market regulations in the post-crisis era. We provide a comprehensive account of the housing decisions of European households between 2010 and 2014, and structurally estimate the housing preference of a simple life-cycle housing choice model. We then evaluate the effect of a tighter LTV/LTI regulation via counter-factual simulations. We find that those regulations limit homeownership and wealth accumulation, reduces housing consumption but may be welfare improving for the young households.

Keywords: housing consumption; macroprudential policies; LTV/LTI regulation (search for similar items in EconPapers)
JEL-codes: D14 D31 D91 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-eur and nep-ure
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:172018

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