Much of the literature on the effect of housing wealth on consumption has been embedded in a simple life-cycle model in … which housing price changes work as a wealth effect. In such models, windfall gains in housing always lead to positive … changes in consumption. However, this might constitute a fallacy of composition. Such models ignore that changes in housing …

Much of the literature on the effect of housing wealth on consumption has been embedded in a simple life-cycle model in … which housing price changes work as a wealth effect. In such models, windfall gains in housing always lead to positive … changes in consumption. However, this might constitute a fallacy of composition. Such models ignore that changes in housing …

The vast majority of household wealth in the U.S. is held in illiquid assets, primarily housing, making households … households are tempted to consume their liquid wealth but can use illiquid housing as a savings commitment device. The importance … of temptation and commitment is identified using data on consumption, liquid assets, and housing wealth over the life …

The extant literature regarding the effects of housing on stock investment shows inconsistent findings, either positive … or negative effects have been reported. This paper investigates the mechanisms by which housing affects household stock … and quantify the magnitudes of contemporaneous "wealth effects" and "crowd-out effects" of housing on household equity …

by owner-occupied housing whereas unsecured debt can be discharged according to bankruptcy regulations. We show that the …

This paper develops an open-economy DSGE model with a housing-market sector and a borrowing constraint. Contrary to … standard conventions, domestic households are allowed to invest in foreign housing and vice versa. Using Bayesian methods, the … model is applied to data for Hong Kong. The results show that Hong Kong’s housing market is quite open to foreign investment …

In this paper, we study a household’s optimal life-cycle housing choices by calibrating a model with uninsurable … choose to convert illiquid home equity to liquid asset to finance non-housing consumption in the absence of lower borrowing … the importance of labor income and house price risks in housing decisions. In comparison to the benchmark case, a higher …

The empirical literature has demonstrated that housing assets exhibit larger wealth effects than stocks (or, more … broadly, financial assets), which is often interpreted as a larger MPC (Marginal Propensity of Consumption) out of housing … wealth. Still, the question remains as to whether this stylized fact has anything to do with the collaterality of housing …

This paper investigates whether the inclusion of housing in a household portfolio is important to the household …, and inflation. In addition to financial assets such as stocks and bonds, we incorporate a real asset, residential housing … Expenditure Survey. Since changes in housing return can affect consumption of households over time, we investigate whether the …