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Housing Wealth Effects in Japan: Evidence Based on Household Micro Data

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  • Hori Masahiro

    (Hitotsubashi University, School of International and Public Policy, 2-1-2 HitotsubashiChiyoda-ku, Tokyo 101-8439, Japan)

  • Niizeki Takeshi

    (Cabinet Office, Economic and Social Research Institute, 1-6-1 Nagata-choChiyoda-ku, Tokyo, 100-8914, Japan)

Abstract

Using micro data covering almost 500,000 Japanese households over the period 1983–2012, we examine to what extent household consumption responds to changes in housing wealth. To do so, we estimate the housing wealth of individual households by matching several official statistics. Employing cross-section and pseudo-panel-based regressions, we find that the marginal propensity to consume (MPC) out of housing wealth is approximately 0.0008–0.0013 for nondurable consumption and 0.0059–0.0082 for total consumption. We further find that the consumption response of older households is larger than that of younger households, which is consistent with the pure wealth effects hypothesis.

Suggested Citation

  • Hori Masahiro & Niizeki Takeshi, 2019. "Housing Wealth Effects in Japan: Evidence Based on Household Micro Data," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-28, April.
    • Handle: RePEc:bpj:bejeap:v:19:y:2019:i:2:p:28:n:8
    DOI: 10.1515/bejeap-2018-0101
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    Cited by:

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    More about this item

    Keywords

    housing wealth; household consumption; life cycle/permanent income hypothesis;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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