Title

No.67-Qinghai Li-The Impact of Housing Asset Fluctuation on Consumption in Urban China

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2017/7/27 11:16:06

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struggle12

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Introduction

We evaluate the impact of housing asset fluctuation on consumption in urban China based on household level panel data, and then analyze its mechanism and heterogeneity effect on different population groups. We find three general results: Housing asset fluctuation has a positive effect on household consumption, while the long term effect is much stronger than short term effect. Meanwhile, precautionary saving is the only mechanism to explain the positive impact of housing asset changes on household consumption, while the liquidity constraints and direct wealth effect are not existed in China. At last, the mechanism of precautionary saving could be heterogeneous in different population groups.

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