Comparing Wealth Effects: The Stock Market Versus the Housing Market [report]

Karl Case, Robert Shiller, John Quigley
2001 unpublished
We examine the link between increases in housing wealth, financial wealth, and consumer spending. We rely upon a panel of 14 countries observed annually for various periods during the past 25 years and a panel of U.S. states observed quarterly during the 1980s and 1990s. We impute the aggregate value of owner-occupied housing, the value of financial assets, and measures of aggregate consumption for each of the geographic units over time. We estimate regressions relating consumption to income
more » ... wealth measures, finding a statistically significant and rather large effect of housing wealth upon household consumption.
doi:10.3386/w8606 fatcat:oob4vvxepbawjlgof72qnkzpcm