Housing Wealth, Stock Market Wealth and Consumption: A Panel Analysis for Australia
Using 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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Volume (Year): 83 (2007)
Issue (Month): 261 (06)
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