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Paper eres2001_260:
Housing Market Gains and Consumer Spending

id eres2001_260
authors Quigley, John
year 2001
title Housing Market Gains and Consumer Spending
source 8th European Real Estate Society Conference (26-29 June 2001) Alicante, Spain
summary Worries about "irrational exuberance" in stock prices have renewed interest in the linkage between measures of wealth and consumer spending. In particular, unrealized capital gains in the stock market and also in the housing market may have substantially affected consumer spending, amplifying the recent expansion and perhaps increasing the danger of recession. The paper combines an analysis of U.S. states with one focussing on the international experience during the past three decades. It estimates the effect of housing wealth and stock market inflation of asset prices upon consumer spending for US states and for EU countries. We estimate simple models of consumption behavior adding measures of the unrealized capital gains in housing. The results for both the U.S. and for Europe indicate a strong relationship between capital gains in housing and consumer spending. If anything, the results are stronger for housing wealth than for stock market wealth.
series ERES:conference
discussion No discussions. Post discussion ...
session Housing and consumption
last changed 2009/07/10 18:07
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