Eres : Digital Library : Works

Paper eres2009_276:
The Relationship between Housing Wealth, Financial Wealth and Household Consumption in China

id eres2009_276
authors Chen , Jie; Zhu, Aiyong
year 2009
title The Relationship between Housing Wealth, Financial Wealth and Household Consumption in China
source 16th Annual European Real Estate Society Conference in Stockholm, Sweden
summary The paper investigates the relationship between changes in housing wealth, financial wealth and the trend movements of household consumption in urban China. By employing the VECM cointegration model, we demonstrate that there is a unique long-run cointegrating relationship between the household consumption, disposable income, financial wealth and housing wealth in urban China. Meanwhile, we find that the housing wealth is the mere factor to restore the long run equilibrium relationship when the cointegrated system is disturbed by external shock. In addition, our permanent-transitory variance decomposition analysis indicates that nearly all variance in the movement of consumption is permanent, supporting the classical random walk hypothesis of consumption behavior. However, a large proportion of variance in the short-run movements of housing wealth is found to be transitory.
keywords Financial Wealth; Housing Wealth; Consumption; China
series ERES:conference
email jiech@fudan.edu.cn, zhudayong_cn@hotmail.com.
discussion No discussions. Post discussion ...
ratings
session Housing
last changed 2009/09/16 16:22
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