House prices and consumption inequality

Arbeitspapier

I characterize how house price shocks affect consumption inequality using a life-cycle model of housing and non-housing consumption with incomplete markets. I derive analytical expressions for the dynamics of inequalities and use these to analyze large house prices swings seen in the UK. I show that movements in consumption inequality were large, that they correspond with the theoretical predictions qualitatively, and that the model explains a large fraction of the movements quantitatively. I demonstrate the accuracy of this analysis using an extended model's full non-linear solution. Finally, accounting for house price shocks alters estimates of labour-income risks using cross-sectional data.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IFS Working Papers ; No. W19/24

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Personal Income, Wealth, and Their Distributions ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Macroeconomics: Consumption; Saving; Wealth
• Thema: Consumption inequality ; Wealth effect ; Collateral effect ; Housing

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Etheridge, Ben
• Ereignis: Veröffentlichung
• (wer): Institute for Fiscal Studies (IFS)
• (wo): London
• (wann): 2019

Weitere Informationen

• DOI: doi:10.1920/wp.ifs.2019.1924
• Handle: http://hdl.handle.net/10419/223268
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ