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Saving Behavior and Housing Wealth Evidence from German Micro Data

Author

Listed:
  • Gröbel Sören

    (Institute of Spatial and Housing Economics, University of Muenster, Münster, Germany)

  • Ihle Dorothee

    (Institute of Spatial and Housing Economics, University of Muenster, Münster, Germany)

Abstract

Housing property is the most important position in a household’s wealth portfolio. Even though there is strong evidence that house price cycles and saving patterns behave synchronously, the underlying causes remain controversial. The present paper examines if there is a wealth effect of house prices on savings using household-level panel data from the German Socio-Economic Panel for the period 1996-2012. We find that young homeowners decrease their savings in response to unanticipated house price shocks, whereas old households hardly respond to house price changes. Although effects are relatively low in magnitude, we interpret this as evidence of a housing wealth effect.

Suggested Citation

  • Gröbel Sören & Ihle Dorothee, 2018. "Saving Behavior and Housing Wealth Evidence from German Micro Data," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 238(6), pages 501-539, October.
    • Handle: RePEc:jns:jbstat:v:238:y:2018:i:6:p:501-539:n:7
    DOI: 10.1515/jbnst-2017-0118
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    More about this item

    Keywords

    housing wealth; saving behavior; Germany;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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