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Household wealth in the euro area: The importance of intergenerational transfers, homeownership and house price dynamics

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  • Mathä, Thomas Y.
  • Porpiglia, Alessandro
  • Ziegelmeyer, Michael

Abstract

Results from the Eurosystem Household Finance and Consumption Survey reveal substantial variation in household net wealth across euro area countries that await explanation. This paper focuses on three main factors: (i) homeownership, (ii) housing value appreciation and (iii) intergenerational transfers. We show that these three factors, in addition to the common household and demographic factors, are relevant for the net wealth accumulation process in all euro area countries, and that, using various decomposition techniques, differences in homeownership rates and house price dynamics are important for explaining wealth differences across euro area countries.

Suggested Citation

  • Mathä, Thomas Y. & Porpiglia, Alessandro & Ziegelmeyer, Michael, 2017. "Household wealth in the euro area: The importance of intergenerational transfers, homeownership and house price dynamics," Journal of Housing Economics, Elsevier, vol. 35(C), pages 1-12.
  • Handle: RePEc:eee:jhouse:v:35:y:2017:i:c:p:1-12
    DOI: 10.1016/j.jhe.2016.12.001
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    Cited by:

    1. Luc Arrondel & Laura Bartiloro & Pirmin Fessler & Peter Lindner & Thomas Y. Mathä & Cristiana Rampazzi & Frédérique Savignac & Tobias Schmidt & Martin Schürz & Philip Vermeulen, 2016. "How Do Households Allocate Their Assets? Stylized Facts from the Eurosystem Household Finance and Consumption Survey," International Journal of Central Banking, International Journal of Central Banking, vol. 12(2), pages 129-220, June.
    2. Thomas Y. Mathä & Alessandro Porpiglia & Michael Ziegelmeyer, 2014. "Wealth differences across borders and the effect of real estate price dynamics: Evidence from two household surveys," BCL working papers 90, Central Bank of Luxembourg.
    3. Felipe Martínez & Francisca Uribe, 2017. "Distribución de Riqueza no Previsional de los Hogares Chilenos," Working Papers Central Bank of Chile 806, Central Bank of Chile.
    4. Dimitris Christelis & Michael Ehrmann & Dimitris Georgarakos, 2015. "Exploring Differences in Household Debt Across Euro Area Countries and the United States," Staff Working Papers 15-16, Bank of Canada.
    5. Fessler, Pirmin & Schürz, Martin, 2015. "Private wealth across European countries: the role of income, inheritance and the welfare state," Working Paper Series 1847, European Central Bank.
    6. Dimitris Christelis & Michael Ehrmann & Dimitris Georgarakos, 2017. "Exploring Differences in Household Debt Across the United States and Euro Area Countries," CSEF Working Papers 465, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    7. Andrej Cupak & Pirmin Fessler & Maria Antoinette Silgoner & Elisabeth Ulbrich, 2018. "Exploring differences in financial literacy across countries: the role of individual characteristics and institutions," Working Papers 220, Oesterreichische Nationalbank (Austrian Central Bank).
    8. Mario Holzner & Stefan Jestl, 2015. "Of proprietors and proletarians," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 141, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    9. Leo Kaas & Georgi Kocharkov & Edgar Preugschat, 2015. "Wealth Inequality and Homeownership in Europe," CESifo Working Paper Series 5498, CESifo Group Munich.
    10. Anastasia Girshina & Thomas Y. Mathä & Michael Ziegelmeyer, 2017. "The Luxembourg Household Finance and Consumption Survey: Results from the 2nd wave," BCL working papers 106, Central Bank of Luxembourg.
    11. Andrej Cupak & Pirmin Fessler & Maria Silgoner & Elisabeth Ulbrich, 2018. "Financial literacy gaps across countries: the role of individual characteristics and institutions," Working and Discussion Papers WP 2/2018, Research Department, National Bank of Slovakia.
    12. Anita Tiefensee & Christian Westermeier, 2016. "Intergenerational Transfers and Wealth in the Euro-Area: The Relevance of Inheritances and Gifts in Absolute and Relative Terms," Discussion Papers of DIW Berlin 1556, DIW Berlin, German Institute for Economic Research.
    13. Thomas Y. Mathä & Alessandro Porpiglia & Michael Ziegelmeyer, 2014. "Wealth differences across borders and the effect of real estate price dynamics: Evidence from two household surveys," BCL working papers 90, Central Bank of Luxembourg.
    14. Leo Kaas & Georgi Kocharkov & Edgar Preugschat, 2016. "Does Homeownership Promote Wealth Accumulation?," Working Paper Series of the Department of Economics, University of Konstanz 2016-03, Department of Economics, University of Konstanz.
    15. Stefan Jestl & Mario Holzner & Sebastian Leitner, 2015. "Immobilienvermögen und Hypothekarverschuldung der Haushalte im Europavergleich," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 41(1), pages 49-70.
    16. repec:nbp:nbpbik:v:48:y:2017:i:3:p:295-326 is not listed on IDEAS
    17. Eurosystem Household Finance and Consumption Network, 2013. "The Eurosystem Household Finance and Consumption Survey - Results from the first wave," Statistics Paper Series 2, European Central Bank.

    More about this item

    Keywords

    Household wealth; Homeownership; Property prices; Inheritance; Euro area;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods

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