Stock Market Wealth and Consumption
This paper explores the link between changes in the aggregate value of corporate stock and changes in consumer spending. It presents data on the distribution of corporate stock ownership based on the 1998 Survey of Consumer Finances. It also uses time-series evidence on the comovement of stock market wealth and various categories of consumer spending to calibrate "the wealth effect." It concludes that in the year after a change in stock market values, consumer spending is likely to rise by between one and two cents for each dollar increase in the value of corporate stock.
Volume (Year): 14 (2000)
Issue (Month): 2 (Spring)
|Contact details of provider:|| Web page: https://www.aeaweb.org/jep/|
More information through EDIRC
|Order Information:||Web: https://www.aeaweb.org/subscribe.html|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Engelhardt, Gary V., 1996. "House prices and home owner saving behavior," Regional Science and Urban Economics, Elsevier, vol. 26(3-4), pages 313-336, June.
- Joseph Tracy & Henry Schneider & Sewin Chan, 1999. "Are stocks overtaking real estate in household portfolios?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 5(Apr).
- Richard K. Green, 1999. "Stock Prices and House Prices in California: New Evidence of a Wealth Effect? A Note," Wisconsin-Madison CULER working papers 99-09, University of Wisconsin Center for Urban Land Economic Research.
- Jonathan A. Parker, 1999.
"Spendthrift in America? On Two Decades of Decline in the U.S. Saving Rate,"
NBER Working Papers
7238, National Bureau of Economic Research, Inc.
- Jonathan A. Parker, 2000. "Spendthrift in America? On Two Decades of Decline in the U.S. Saving Rate," NBER Chapters, in: NBER Macroeconomics Annual 1999, Volume 14, pages 317-387 National Bureau of Economic Research, Inc.
- Sydney Ludvigson & Charles Steindel, 1999.
"How important is the stock market effect on consumption?,"
Economic Policy Review,
Federal Reserve Bank of New York, issue Jul, pages 29-51.
- Sydney Ludvigson & Charles Steindel, 1998. "How important is the stock market effect on consumption?," Research Paper 9821, Federal Reserve Bank of New York.
- Bhatia, Kul B, 1972. "Capital Gains and the Aggregate Consumption Function," American Economic Review, American Economic Association, vol. 62(5), pages 866-79, December.
- Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1992. "The Carnegie Conjecture: Some Empirical Evidence," NBER Working Papers 4118, National Bureau of Economic Research, Inc.
- Christina D. Romer, 1990. "The Great Crash and the Onset of the Great Depression," The Quarterly Journal of Economics, Oxford University Press, vol. 105(3), pages 597-624.
- Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1993. "The Carnegie Conjecture: Some Empirical Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 108(2), pages 413-435.
- Imbens, G.W. & Rubin, D. & Sacerdote, B., 1999.
"Estimating the effect of unearned income on labor supply, earnings, savings and consumption : Evidence from a survey of lottery players,"
99.34, Tilburg University, Center for Economic Research.
- Guido W. Imbens & Donald B. Rubin & Bruce Sacerdote, 1999. "Estimating the Effect of Unearned Income on Labor Supply, Earnings, Savings, and Consumption: Evidence from a Survey of Lottery Players," NBER Working Papers 7001, National Bureau of Economic Research, Inc.
- William G. Gale & John Sabelhaus, 1999. "Perspectives on the Household Saving Rate," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(1), pages 181-224.
- Martha Starr-McCluer, 2002.
"Stock Market Wealth and Consumer Spending,"
Western Economic Association International, vol. 40(1), pages 69-79, January.
- Flint Brayton & Peter A. Tinsley, 1996. "A guide to FRB/US: a macroeconomic model of the United States," Finance and Economics Discussion Series 96-42, Board of Governors of the Federal Reserve System (U.S.).
- repec:pri:indrel:413 is not listed on IDEAS
- Alan Krueger, 1999.
"Measuring Labor's Share,"
NBER Working Papers
7006, National Bureau of Economic Research, Inc.
- Alan Krueger, 1999. "Measuring Labor's Share," Working Papers 792, Princeton University, Department of Economics, Industrial Relations Section..
- Jonathan S. Skinner, 1996.
"Is Housing Wealth a Sideshow?,"
in: Advances in the Economics of Aging, pages 241-272
National Bureau of Economic Research, Inc.
- repec:fth:prinin:413 is not listed on IDEAS
- James M. Poterba & David A. Wise, 1998.
"Individual Financial Decisions in Retirement Saving Plans and the Provision of Resources for Retirement,"
in: Privatizing Social Security, pages 363-401
National Bureau of Economic Research, Inc.
- James M. Poterba & David A. Wise, 1996. "Individual Financial Decisions in Retirement Saving Plans and The Provision of Resources for Retirement," NBER Working Papers 5762, National Bureau of Economic Research, Inc.
- Edward N. Wolff, 1998. "Recent Trends in the Size Distribution of Household Wealth," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 131-150, Summer.
- Kasten, Richard A. & Weiner, David & Woodward, G. Thomas, 1999. "What Made Receipts Boom and When Will They Go Bust?," National Tax Journal, National Tax Association, vol. 52(n. 3), pages 339-48, September.
- F. Thomas Juster & Joseph Lupton & James P. Smith & Frank Stafford, 2004. "Savings and Wealth; Then and Now," Labor and Demography 0403027, EconWPA.
When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:14:y:2000:i:2:p:99-118. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros)or (Michael P. Albert)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.