This article uses a large panel dataset that tracks the housing wealth and credit card spending of 12,793 individuals in Hong Kong to study the relationship between housing wealth and household consumption. I identify a significant effect of housing wealth on consumption. A pure wealth effect can explain part of the sensitivity: households with multiple houses have much stronger consumption responses. Consistent with a relaxation of the credit constraints, mortgage refinancing significantly increases households' consumption sensitivities. However, for the majority of the households that do not refinance, consumption sensitivity appears to be due to a reduction in precautionary saving. © The Author 2010. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved.
CITATION STYLE
Gan, J. (2010). Housing wealth and consumption growth: Evidence from a large panel of households. Review of Financial Studies, 23(6), 2229–2267. https://doi.org/10.1093/rfs/hhp127
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