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Consumption and house prices in Ireland

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  • Vincent (Vincent Peter) Hogan
  • Patrick O'Sullivan

Abstract

We examine the link between private consumption and housing wealth in Ireland. We find that the marginal propensity to consume out of housing wealth is essentially zero. This is in marked contrast to the recent evidence for other OECD countries. The evidence is robust to changes in statistical methodology. Thus we can conclude that the recent consumption growth has not been financed by borrowing against housing wealth perhaps because that the private sector does not find recent increases in house prices fully credible.

Suggested Citation

  • Vincent (Vincent Peter) Hogan & Patrick O'Sullivan, 2003. "Consumption and house prices in Ireland," Open Access publications 10197/330, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:oapubs:10197/330
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    File URL: http://hdl.handle.net/10197/330
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    References listed on IDEAS

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    8. Kenny, Geoff, 1998. "The Housing Market and the Macroeconomy: Evidence From Ireland," Research Technical Papers 1/RT/98, Central Bank of Ireland.
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    Cited by:

    1. Acheson, Jean & Deli, Yota & Morgenroth, Edgar & Lambert, Derek & Murphy, Martin, 2018. "VAT revenue elasticities: an analytical approach," Papers WP596, Economic and Social Research Institute (ESRI).
    2. O'Donnell, Nuala, 2007. "Housing Wealth and Consumption," Quarterly Bulletin Articles, Central Bank of Ireland, pages 119-136, January.
    3. International Monetary Fund, 2005. "Ireland: Selected Issues," IMF Staff Country Reports 2005/370, International Monetary Fund.
    4. Ms. Marialuz Moreno Badia, 2006. "Who Saves in Ireland? The Micro Evidence," IMF Working Papers 2006/131, International Monetary Fund.

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