Housing and Equity Wealth Effects of Italian Households
30 Pages Posted: 6 Feb 2008
Date Written: January 2008
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: Suggested Citation