Kraft, Holger; Munk, Claus; Weiss, Farina - 2016
rent-price ratio predicts both house prices and labor income growth. We incorporate the predictability in a rich life … labor income, stochastic house prices, home renting and owning, stock investments, and portfolio constraints. We find that …-time consumption amounts to roughly $179,000 (assuming both an initial wealth and an initial annual income of $20,000), and the …