Housing and Equity Wealth Effects of Italian Households

30 Pages Posted: 6 Feb 2008

See all articles by Charles Grant

Charles Grant

University of Reading

Tuomas A. Peltonen

European Central Bank (ECB)

Date Written: January 2008

Abstract

The study quantifies stock market and housing market wealth effects on households' non-durable consumption using Italian household panel data (SHIW) of 1989-2002. We found all households react similarly to aggregate housing and stock market gains. We also found statistically and economically significant housing wealth effects with a marginal propensity to consume out of idiosyncratic housing wealth gains to be over 8 percent. The results from idiosyncratic equity wealth effects were lower, at around 0.4 percent. We also found that older households react more to changes in housing wealth.

Keywords: Marginal Propensity to Consume, Housing, Equities

JEL Classification: D12, E21

Suggested Citation

Grant, Charles and Peltonen, Tuomas A., Housing and Equity Wealth Effects of Italian Households (January 2008). ECB Working Paper No. 857. Available at SSRN: https://ssrn.com/abstract=1082738

Charles Grant

University of Reading ( email )

Whiteknights
Reading, Berkshire RG6 6AH
United Kingdom

Tuomas A. Peltonen (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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