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The impact of changing demographics and pensions on the demand for housing and financial assets

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  • ČERNÝ, ALEŠ
  • MILES, DAVID
  • SCHMIDT, L'UBOMÍR

Abstract

The main aim of this paper is to analyse the impact of shifting demographics and changes in pension arrangements in a model that includes housing as both an investment asset and a consumption good. We consider the impact on welfare, and on macroeconomic aggregates, of some specific pension reforms. Using a calibrated OLG model with several sources of uncertainty, we find that the impact of ageing and of reform of social security upon the demand for housing and the level of owner occupation is substantial. We find that pension reform has a very significant impact on the demand for, and price of, housing. The interaction between pension reform and housing is a neglected subject and one which the results we present suggest is important.

Suggested Citation

  • Černý, Aleš & Miles, David & Schmidt, L'Ubomír, 2010. "The impact of changing demographics and pensions on the demand for housing and financial assets," Journal of Pension Economics and Finance, Cambridge University Press, vol. 9(3), pages 393-420, July.
    • Handle: RePEc:cup:jpenef:v:9:y:2010:i:03:p:393-420_99
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    Cited by:

    1. Wang, Haining & Cheng, Zhiming & Smyth, Russell & Sun, Gong & Li, Jie & Wang, Wangshuai, 2022. "University education, homeownership and housing wealth," China Economic Review, Elsevier, vol. 71(C).
    2. Renata Korsakienė & Manuela Tvaronavičienė, 2014. "Processes of economic development: case of Lithuanian real estate sector," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 1(3), pages 162-172, March.
    3. Torben Andersen & Mikkel Hermansen, 2014. "Durable consumption, saving and retirement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(3), pages 825-840, July.
    4. Costello, Greg & Fraser, Patricia & Groenewold, Nicolaas, 2011. "House prices, non-fundamental components and interstate spillovers: The Australian experience," Journal of Banking & Finance, Elsevier, vol. 35(3), pages 653-669, March.
    5. Azegami Hideto, 2015. "Do the Over-the-Counter Sales at Banks Expand the Individual Annuity Market in Japan?," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 9(1), pages 47-76, January.
    6. Matt Waldron & Fabrizio Zampolli, 2010. "Household debt, house prices and consumption in the United Kingdom: a quantitative theoretical analysis," Bank of England working papers 379, Bank of England.
    7. Černý, Aleš & Melicherčík, Igor, 2020. "Simple explicit formula for near-optimal stochastic lifestyling," European Journal of Operational Research, Elsevier, vol. 284(2), pages 769-778.

    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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