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Housing Wealth, Financial Wealth and Consumption Expenditure: The Role of Consumer Confidence

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  • Hassan Gholipour Fereidouni

    (Swinburne University of Technology)

  • Reza Tajaddini

    (Swinburne University of Technology)

Abstract

The objective of this paper is to examine the role of consumer confidence on the relationship between two forms of wealth—housing and financial—and four categories of consumption expenditure, which include total consumption, service, durable goods and nondurable goods consumption. This paper uses U.S. quarterly data from 1978 to 2012 for its analysis. Applying the FMOLS estimation method, the results show that consumer confidence has a positive effect on the association between housing wealth and consumption expenditure, whereas its effect on the association between financial wealth and consumption expenditure is negative. The implications of these results are discussed.

Suggested Citation

  • Hassan Gholipour Fereidouni & Reza Tajaddini, 2017. "Housing Wealth, Financial Wealth and Consumption Expenditure: The Role of Consumer Confidence," The Journal of Real Estate Finance and Economics, Springer, vol. 54(2), pages 216-236, February.
    • Handle: RePEc:kap:jrefec:v:54:y:2017:i:2:d:10.1007_s11146-015-9537-9
    DOI: 10.1007/s11146-015-9537-9
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    4. Jie Chen & William Hardin & Mingzhi Hu, 2020. "Housing, Wealth, Income and Consumption: China and Homeownership Heterogeneity," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(2), pages 373-405, June.
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    6. Yener Coskun & Burak Sencer Atasoy & Giacomo Morri & Esra Alp, 2018. "Wealth Effects on Household Final Consumption: Stock and Housing Market Channels," IJFS, MDPI, vol. 6(2), pages 1-32, June.
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    8. Silvia Galdi & Anne Maass & Annalisa Robbiani, 2020. "The bright side of pessimism: Promoting wealth redistribution under (felt) economic hardship," PLOS ONE, Public Library of Science, vol. 15(12), pages 1-34, December.
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    More about this item

    Keywords

    Housing wealth; Financial wealth; Consumer confidence; Consumption expenditure;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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