Housing equity, saving and debt dynamics over the Great Recession

Arbeitspapier

This paper uses the large and heterogeneous house price shocks in Denmark from 2006-2009 to provide new evidence on the contested determinants of the correlation between house prices and saving. Crucially, to compare the savings behaviour of home-owners who experienced di fferent house price shocks but similar shocks to income expectations, we exploit the structure of the wage setting process in the Danish public sector. We fi nd strong evidence of a causal link between changes in house prices and saving for young and old home-owners, both through a direct wealth eff ect and through housing equity serving as collateral or precautionary wealth.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFS Working Papers ; No. W16/12

Classification and Topics

• Classification: Wirtschaft ; Household Saving; Personal Finance ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Macroeconomics: Consumption; Saving; Wealth ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Household Analysis: General
• Subject: Housing ; Saving ; Wealth effect ; Collateral ; Debt dynamics

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Elming, William ; Ermler, Andreas
• Event: Veröffentlichung
• (who): Institute for Fiscal Studies (IFS)
• (where): London
• (when): 2016

Further information

• DOI: doi:10.1920/wp.ifs.2016.1612
• Handle: http://hdl.handle.net/10419/173946
• Last update: 10.03.2025, 11:45 AM CET