This paper examines whether the housing wealth effect – the consumption change induced by house price appreciation – is dependent upon households' attitudes toward risk. A simple theoretical model is introduced to highlight a negative relationship between the wealth effect and risk aversion....

This paper examines whether the housing wealth effect - the consumption change induced by house price appreciation - is dependent upon households' attitudes toward risk. A simple theoretical model is introduced to highlight a negative relationship between the wealth effect and risk aversion. The...