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Wealth Effects on Consumption Plans: French Households in the Crisis

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  • Arrondel, L.
  • Savignac, F.
  • Tracol, K.

Abstract

This paper analyzes the wealth effect on consumption in France by relying on two original household surveys. First, it provides the first estimate of the marginal propensity to consume out of wealth based on micro data for France (Enquête Patrimoine 2009, Insee): a low but significant wealth effect is obtained and financial wealth seems to be significant only for stockholders. Second, it studies how French households have adapted their consumption plans during the 2008-2009 crisis by relying on household self-assessed changes in future consumption (survey PATER). Besides the direct wealth effect, our results confirm the role played by changes in expectations on consumption plans, and thus, by the confidence channel as an additional transmission mechanism of the crisis.

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Bibliographic Info

Paper provided by Banque de France in its series Working papers with number 344.

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Length: 58 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:bfr:banfra:344

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Web page: http://www.banque-france.fr/
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Keywords: wealth effect; housing and financial wealth; consumption; household survey; expectations.;

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References

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Cited by:
  1. Avouyi-Dovi, S. & Labonne, C. & Lecat, R., 2014. "The housing market: the impact of macroprudential measures in France," Financial Stability Review, Banque de France, issue 18, pages 195-206, April.
  2. McCarthy, Yvonne & McQuinn, Kieran, 2013. "Price expectations, distressed mortgage markets and the housing wealth effect," Research Technical Papers 06/RT/13, Central Bank of Ireland.

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