Housing, consumption, and credit constraints
By: Andreas Lehnert.
Series: Finance and economics discussion series ;; 2004-63; Finance and economics discussion series (Online) ;; 2004-63.
Publisher: Federal Reserve Board
Published: 2004
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Description: "I test the credit-market effects of housing wealth shocks by estimating the consumption elasticity of house price shocks among households in different age quintiles.  Younger households face faster expected income growth and hence would like to borrow more than older households.  I estimate consumption elasticities from housing wealth by age quintile to be {4; 0; 3; 8; 3} percent.  As predicted by theory, the youngest group has a higher elasticity of consumption than the next two age quintiles.  That the consumption of the age quintile on the verge of retirement is responsive to housing wealth is also not surprising: I show that these households are likeliest to "downsize" their house and thus realize any capital gains"--Federal Reserve Board web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 11/4/2004.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.