Suchergebnisse

We estimate marginal propensities to consume from wealth shocks. We exploit large asset-price shocks in 2007–2008 and household-level panel data to implement instrumental variables. A fall of one euro in risky financial wealth resulted in cuts to annual total (non-durable) consumption of 8.5–9 (5.5–5.7) cents, with small effects on food spending. Effects seem stronger for lower-wealth or indebted households, but significant responses from wealthier households and those without mortgages are important for our baseline results. Counterfactuals indicate financial-wealth effects were relatively important for consumption falls in Italy in 2007–2008. The estimated effects are consistent with a simulated life-cycle model capturing the wealth shock.

England has very volatile house prices. We use pseudo-panel data spanning multiple house-price cycles over nearly forty years, to assess the extent to which house prices affect access to home ownership by age thirty, and whether differences in ownership rates persist. We find that ownership rates at age thirty have varied substantially, with this variation significantly related to prices. Measurement error problems - attenuation bias and other biases - complicate an analysis of the persistence of these differences in ownership. We use two methods - including one that develops the ideas of Deaton (1985) - to deal with this and find robust evidence that cohorts with low ownership rates at thirty close about 80% of the ownership gap by age forty.

We investigate whether different ages of first‐time house buying lead to persistent differences in homeownership between cohorts. Our data span nearly 40 years and multiple cycles of England's volatile house prices. Ownership rates at thirty have differed substantially, with a significant negative association with prices. The persistence of differences is assessed using synthetic cohort techniques. Two methods of dealing with measurement error problems both indicate that cohorts with low ownership rates at thirty catch up almost all of the ownership gap by forty. Earlier access to homeownership may result in the ownership of slightly larger homes at around forty.