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A Dynamic Model of Housing Wealth Effect: Based on the Diversity of Wealth Expectations

Author

Listed:
  • Jiao Danxiao
  • Wu Di
  • Li Xiuting
  • Dong Jichang

    (School of Management, University of Chinese Academy of Sciences, Beijing100190, China)

  • Dash Wu Desheng

    (Risklab, University of Toronto, 19 Borden ST, Toronto, ON, Canada)

Abstract

Considering the dynamics and diversity of wealth expectations, this paper follows and extends Hall’s consumption function to establish a new dynamic model of housing wealth effect. People are classified into the rich group and the poor group and a housing wealth effect model is made for each group to explore the relationship between housing wealth effect and social inequality. We get three interesting conclusions which are helpful for further empirical test apart from the former deviation or fallacy.

Suggested Citation

  • Jiao Danxiao & Wu Di & Li Xiuting & Dong Jichang & Dash Wu Desheng, 2014. "A Dynamic Model of Housing Wealth Effect: Based on the Diversity of Wealth Expectations," Journal of Systems Science and Information, De Gruyter, vol. 2(1), pages 47-53, February.
    • Handle: RePEc:bpj:jossai:v:2:y:2014:i:1:p:47-53:n:5
    DOI: 10.1515/JSSI-2014-0047
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    References listed on IDEAS

    as
    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    2. Christopher D. Carroll & Misuzu Otsuka & Jiri Slacalek, 2011. "How Large Are Housing and Financial Wealth Effects? A New Approach," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(1), pages 55-79, February.
    3. Janine Aron & John V. Duca & John Muellbauer & Keiko Murata & Anthony Murphy, 2012. "Credit, Housing Collateral, And Consumption: Evidence From Japan, The U.K., And The U.S," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(3), pages 397-423, September.
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