Title: HOUSE PRICE SHOCKS, NEGATIVE EQUITY AND HOUSEHOLD CONSUMPTION IN THE UK
Abstract: We examine the impact of unanticipated housing capital gains on consumption behaviour during the British housing market cycle using individual household data from the British Household Panel Survey and county-level house price data. We condition the models on household real financial capital gains using Family Resources Survey data. We find a marginal propensity to consume out of unanticipated positive shocks to housing wealth of around 0.09 to 0.14, depending on specification. Among our novel findings are asymmetric behaviour between house price rises and falls, and a disproportionate impact on saving if the household had negative housing equity.
Publication Year: 2003
Publication Date: 2003-01-01
Language: en
Type: article
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Cited By Count: 32
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