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- Title
Housing Wealth as Precautionary Saving: Evidence from Urban China.
- Authors
Painter, Gary; Yang, Xi; Zhong, Ninghua
- Abstract
This article provides new evidence on the housing-wealth effect on consumption using household panel data. A key advantage in studying the Chinese housing market is the absence of the collateral channel because households are prohibited from withdrawing housing equity. The results show that for every 1% increase in housing wealth, household consumption increases by 0.14%, suggesting an implied marginal propensity to consume out of housing wealth of 0.023. Further, we find that this marginal propensity to consume is the largest among employees who face greater income uncertainty, suggesting that precautionary-saving motives are driving the results.
- Subjects
HOUSING market; WEALTH; CONSUMPTION (Economics); HOUSEHOLDS &; economics; EQUITY (Law)
- Publication
Journal of Financial & Quantitative Analysis, 2022, Vol 57, Issue 2, p761
- ISSN
0022-1090
- Publication type
Article
- DOI
10.1017/S0022109021000065