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The Impact of House Price Shocks on the Savings of Dutch Homeowners and Renters

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  • Michiel Bijlsma
  • Remco Mocking

Abstract

We study the impact of changes in house prices on savings using administrative panel data on Dutch owner-occupying and renting households over the period 2006-2013. We analyze the immediate response as well as the response aggregated over several years. We find a marginal propensity to save (MPS) out of housing wealth in the short-run between 0 and -0.05, while the long-run effect ranges from -0.02 to -0.13. Younger homeowners consistently respond more strongly both in the short and the long-run, while pre-crisis leverage has a non-homogeneous effect in the short-run and no effect in the long-run. We only find a small, significant, and positive shortrun effect for old renters and no effect for all other groups of renters, suggesting that our results are not driven by common causality.

Suggested Citation

  • Michiel Bijlsma & Remco Mocking, 2017. "The Impact of House Price Shocks on the Savings of Dutch Homeowners and Renters," CPB Discussion Paper 346, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:discus:346
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    References listed on IDEAS

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    Cited by:

    1. Rutger Teulings & Bram Wouterse & Kan Ji, 2019. "Disentangling the effect of household debt on consumption," CPB Discussion Paper 395.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Rutger Teulings & Bram Wouterse & Kan Ji, 2019. "Disentangling the effect of household debt on consumption," CPB Discussion Paper 395, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Lu Zhang, 2019. "Do house prices matter for household consumption?," CPB Discussion Paper 396, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Lu Zhang, 2019. "Do house prices matter for household consumption?," CPB Discussion Paper 396.rdf, CPB Netherlands Bureau for Economic Policy Analysis.

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • 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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