House Prices and Home Owner Saving Behavior
This paper examines the empirical link between house price appreciation and the savings behavior of home owners during the 1980s. The analysis uses household asset and debt data for a sample of under age sixty-five home owning households from the 1984 and 1989 waves of the PSID to construct changes in real household wealth as a measure of household saving behavior. Cross-time and cross-regional variation in housing market conditions are used to identify behavior savings effects. The empirical analysis suggests that the estimated marginal propensity to consume out of real housing capital gains is 0.03 for the median saver household. However, there is an asymmetry in the saving response to both total and unanticipated real housing capital gains. All of the savings offset comes from households that experience real housing capital losses. Households that experience real gains do not change their saving behavior. The existence of this asymmetry casts doubt on the power of changes in house prices to explain the time series path of saving in the U.S.
|Date of creation:||Jul 1995|
|Date of revision:|
|Publication status:||published as Regional Science & Urban Economics, vol. 26, no. 3-4, pp. 313-336, June 1996|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nakagami, Yasuhiro & Pereira, Alfredo M., 1991. "Housing appreciation, mortgage interest rates, and homeowner mobility," Journal of Urban Economics, Elsevier, vol. 30(3), pages 271-292, November.
- Garcia, R. & Lusardi, A. & Ng, S., 1995.
"Excess Sensitivity and Asymmetries in Consumption: an Empirical Investigation,"
Cahiers de recherche
9511, Universite de Montreal, Departement de sciences economiques.
- Garcia, Rene & Lusardi, Annamaria & Ng, Serena, 1997. "Excess Sensitivity and Asymmetries in Consumption: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(2), pages 154-76, May.
- René Garcia & Serena Ng & Annamaria Lusardi, 1995. "Excess Sensitivity and Asymmetries in Consumption: An Empirical Investigation," CIRANO Working Papers 95s-09, CIRANO.
- Garcia, R. & Lusardi, A. & Ng, S., 1995. "Excess Sensitivity and Asymmetries in Consumption: An Empirical Investigation," Cahiers de recherche 9511, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Thaler, Richard H, 1990. "Saving, Fungibility, and Mental Accounts," Journal of Economic Perspectives, American Economic Association, vol. 4(1), pages 193-205, Winter.
- Hilary W. Hoynes & Daniel L. McFadden, 1996.
"The Impact of Demographics on Housing and Nonhousing Wealth in the United States,"
in: The Economic Effects of Aging in the United States and Japan, pages 153-194
National Bureau of Economic Research, Inc.
- Hilary Williamson Hoynes & Daniel McFadden, 1994. "The Impact of Demographics on Housing and Non-Housing Wealth in the United States," NBER Working Papers 4666, National Bureau of Economic Research, Inc.
- Karl E. Case & Christopher J. Mayer, 1995.
"Housing price dynamics within a metropolitan area,"
95-3, Federal Reserve Bank of Boston.
- Skinner, Jonathan, 1987. "A superior measure of consumption from the panel study of income dynamics," Economics Letters, Elsevier, vol. 23(2), pages 213-216.
- Venti, Steven F. & Wise, David A., 1984.
"Moving and housing expenditure: Transaction costs and disequilibrium,"
Journal of Public Economics,
Elsevier, vol. 23(1-2), pages 207-243.
- Steven F. Venti & David A. Wise, 1982. "Moving and Housing Expenditure: Transaction Costs and Disequilibrium," NBER Working Papers 1012, National Bureau of Economic Research, Inc.
- Sheiner Louise, 1995. "Housing Prices and the Savings of Renters," Journal of Urban Economics, Elsevier, vol. 38(1), pages 94-125, July.
- Christopher J. Mayer, 1993. "Taxes, income distribution, and the real estate cycle: why all houses do not appreciate at the same rate," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 39-50.
- Peek, Joe, 1983. "Capital Gains and Personal Saving Behavior," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 15(1), pages 1-23, February.
- Gary V. Engelhardt & Christopher J. Mayer, 1994. "Gifts for home purchase and housing market behavior," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 47-58.
- Barry Bosworth & Gary Burtless & John Sabelhaus, 1991. "The Decline in Saving: Some Microeconomic Evidence," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 183-256.
- Kul B. Bhatia, 1987. "Real Estate Assets and Consumer Spending," The Quarterly Journal of Economics, Oxford University Press, vol. 102(2), pages 437-444.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5183. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.