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Wealth Effects on Consumption in Malta: Evidence from Household Level Data

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  • Ilias Georgakopoulos

Abstract

This paper attempts to examine for the first time the effects of household wealth on consumption in Malta, based on household level data from the 2017 Household Finance and Consumption Survey (HFCS). The estimation of the log-log consumption function is performed using OLS regression, after taking into account the survey design. The results provide evidence in support of the existence of a wealth effect on consumption, stemming from housing and financial wealth. In particular, the housing wealth effect on consumption is positive and higher than the financial wealth effect for the whole sample size, especially for homeowners. In addition, comparisons in the differences in wealth effects across age groups confirm the existence of a life-cycle pattern in consumption.

Suggested Citation

  • Ilias Georgakopoulos, 2019. "Wealth Effects on Consumption in Malta: Evidence from Household Level Data," Applied Economics and Finance, Redfame publishing, vol. 6(4), pages 28-35, July.
    • Handle: RePEc:rfa:aefjnl:v:6:y:2019:i:4:p:28-35
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    References listed on IDEAS

    as
    1. Christelis, Dimitris & Georgarakos, Dimitris & Jappelli, Tullio, 2015. "Wealth shocks, unemployment shocks and consumption in the wake of the Great Recession," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 21-41.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    consumption; wealth; household survey;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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