Housing Wealth, Stock Market Wealth and Consumption: A Panel Analysis for Australia*

• Autores: Nikola Dvornak, Marion Kohler
• Localización: Economic record, ISSN 0013-0249, Vol. 83, Nº. 261, 2007, págs. 117-130
• Idioma: inglés
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• Resumen

  • Using a panel of Australian States, we estimate how changes in household wealth affect consumption expenditure. Both housing and stock market wealth have a significant effect on consumption: a permanent $A1 increase in stock market wealth increases long-run annual consumption by 6–9 cents; the same increase in housing wealth increases annual consumption by around 3 cents. With households’ housing assets more than three times that of stock market assets, a 1 per cent increase in housing wealth has an effect on consumption at least as large as that of a 1 per cent increase in stock market wealth.