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Wealth Effects Out of Financial and Housing Wealth: Cross Country and Age Group Comparisons

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  • Eva Sierminska

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  • Yelena Takhtamanova

Abstract

This study is a contribution to the literature on the link between consumption and wealth (wealth effect). We use a new source of harmonized micro data (Luxembourg Wealth Study) to investigate whether there are differences in wealth effects out of different types of wealth and also across age groups. Three countries are considered: Canada, Italy and Finland. We find that the overall wealth effect out of housing is stronger than the effect out of financial wealth for all the countries in the sample. Additionally, in accordance with life cycle theory of consumption, we find housing wealth effect to be significantly lower for younger households. We also find between-country differences in the wealth effects.

Suggested Citation

  • Eva Sierminska & Yelena Takhtamanova, 2006. "Wealth Effects Out of Financial and Housing Wealth: Cross Country and Age Group Comparisons," LWS Working papers 4, LIS Cross-National Data Center in Luxembourg.
  • Handle: RePEc:lis:lwswps:4
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    References listed on IDEAS

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    Cited by:

    1. Timm Bönke & Markus Grabka & Carsten Schröder & Edward N. Wolff, 2017. "A Head-to-Head Comparison of Augmented Wealth in Germany and the United States," NBER Working Papers 23244, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • J1 - Labor and Demographic Economics - - Demographic Economics

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