search query: @indexterm CONSUMPTION / total: 885
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| Author: | Attanasio, O. Wakefield, M. Leicester, A. |
| Title: | Do house prices drive consumption growth? The coincident cycles of house prices and consumption in the UK |
| Journal: | Journal of the European Economic Association
2011 : JUN, VOL. 9:3, p. 399-435 |
| Index terms: | housing prices consumption decision making United Kingdom household economics |
| Freeterms: | economic models |
| Language: | eng |
| Abstract: | This paper applies a realistic structural lifecycle model of consumption and housing decisions to understand how data might distinguish various mechanisms that explain the correlation between house prices and consumption. The model includes price and earnings shocks estimated from data (the latter includes aggregate and idiosyncratic components), and incorporates realistic characteristics of the UK mortgage market. The model is simulated by using over 30 years of realized shocks and under counterfactual scenarios. The results verify the intuition of earlier studies: house price shocks should have a larger impact on the older households' consumption and earnings shocks on young households'. |
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