Housing Wealth, Stock Market Wealth and Consumption: A Panel Analysis for Australia
AbstractUsing a panel of Australian States, we estimate how changes in household wealth affect consumption expenditure. Both housing and stock market wealth have a significant effect on consumption: a permanent $A1 increase in stock market wealth increases long-run annual consumption by 6-9 cents; the same increase in housing wealth increases annual consumption by around 3 cents. With households' housing assets more than three times that of stock market assets, a 1 per cent increase in housing wealth has an effect on consumption at least as large as that of a 1 per cent increase in stock market wealth. Copyright © 2007 The Economic Society of Australia.
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Bibliographic InfoArticle provided by The Economic Society of Australia in its journal Economic Record.
Volume (Year): 83 (2007)
Issue (Month): 261 (06)
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Other versions of this item:
- Nikola Dvornak & Marion Kohler, 2003. "Housing Wealth, Stock Market Wealth and Consumption: A Panel Analysis for Australia," RBA Research Discussion Papers rdp2003-07, Reserve Bank of Australia.
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Housing Supply and Markets
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