The Impact of Changing Demographics and Pensions on the Demand for Housing and Financial Assets

Cass Business School Research Paper

Journal of Pension Economics and Finance, 2010, 9(3), 393-420

29 Pages Posted: 3 Jul 2005 Last revised: 30 Sep 2019

See all articles by Aleš Černý

Aleš Černý

Cass Business School, City, University of London

David Miles

Imperial College Business School; The Bank of England; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Lubomir Schmidt

UBS Investment Bank

Multiple version iconThere are 2 versions of this paper

Date Written: December 6, 2006

Abstract

The main aim of this paper is to to analyse the impact of shifting demographics and changes in pension arrangements in a model which includes housing both as an investment asset and a consumption good. We consider the impact on welfare, and on macroeconomic aggregates, of some specific pension reforms. Using a calibrated OLG model with several sources of uncertainty we find that the impact of ageing and of reform of social security upon the demand for housing and the level of owner occupation is substantial. We find that pension reform has a very significant impact on the demand for, and price of, housing. The interaction between pension reform and housing is a neglected subject and one which the results we present suggest is important.

Keywords: pension reform, portfolio allocation, housing, OLG model

JEL Classification: H31, H55, C61, G11

Suggested Citation

Černý, Aleš and Miles, David Kenneth and Schmidt, Lubomir, The Impact of Changing Demographics and Pensions on the Demand for Housing and Financial Assets (December 6, 2006). Cass Business School Research Paper. Available at SSRN: https://ssrn.com/abstract=750604 or http://dx.doi.org/10.2139/ssrn.750604

Aleš Černý (Contact Author)

Cass Business School, City, University of London ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

David Kenneth Miles

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

The Bank of England ( email )

Threadneedle Street
London EC2R 8AH
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Lubomir Schmidt

UBS Investment Bank ( email )

100 Liverpool Street
London, EC2M2RH
United Kingdom

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