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Intratemporal Substitution between Housing and Nondurable Consumption: Evidence from Reinvestment in Housing Stock

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  • Khorunzhina, Natalia

Abstract

I investigate empirically the intratemporal dependence between nondurable consumption and housing. Using the data on maintenance expenditures and self-assessed house value, I separate the measure of housing stock and house prices, and use these data for estimation of the model, which allows for testing whether consumption and housing are characterized by intratemporal nonseparability in the contemporaneous utility. I find evidence in favor of a substitution mechanism between housing and total nondurable consumption. A similar conclusion is reached for some separate consumption categories, such as food, transport, clothing, vacations, and entertainment.

Suggested Citation

  • Khorunzhina, Natalia, 2018. "Intratemporal Substitution between Housing and Nondurable Consumption: Evidence from Reinvestment in Housing Stock," MPRA Paper 88667, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:88667
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    References listed on IDEAS

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    More about this item

    Keywords

    Housing; Nondurable Consumption; Intratemporal Nonseparability;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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