Housing wealth, stock wealth and consumption

Abstract

The growth of the stock market in 1990s and the enormous increase in house market during the last decades have reawakened the wealth impacts on the consumption. The main goal of this study is to determine the differential impact of two wealth categories on consumption expenditures. Here we also attempt to compare two alternative housing wealth and stock wealth measures used in the previous literature. The sample period used in the analysis is 2000-2014, which also allows us to identify the effect of the great recession on the consumption parameters for 31 OECD countries. We find strong evidence which housing wealth has important effects on consumption than stock wealth.