TY  - JOUR
AU  - Engelhardt,Gary V.
TI  - House Prices and Home Owner Saving Behavior
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5183
PY  - 1995
Y2  - July 1995
UR  - http://www.nber.org/papers/w5183
L1  - http://www.nber.org/papers/w5183.pdf
N1  - Author contact info:
Gary V. Engelhardt
Center for Policy Research
423 Eggers Hall
Syracuse University
Syracuse, NY  13244-1020
Tel: (315) 443-3114
Fax: (315) 443-1081
E-Mail: gvengelh@maxwell.syr.edu
AB  - This paper examines the empirical link between house price appreciation and the savings behavior of home owners during the 1980s. The analysis uses household asset and debt data for a sample of under age sixty-five home owning households from the 1984 and 1989 waves of the PSID to construct changes in real household wealth as a measure of household saving behavior.  Cross-time and cross-regional variation in housing market conditions are used to identify behavior savings effects. The empirical analysis suggests that the estimated marginal propensity to consume out of real housing capital gains is 0.03 for the median saver household.  However, there is an asymmetry in the saving response to both total and unanticipated real housing capital gains.  All of the savings offset comes from households that experience real housing capital losses.  Households that experience real gains do not change their saving behavior.  The existence of this asymmetry casts doubt on the power of changes in house prices to explain the time series path of saving in the U.S.
ER  -