NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Comparing Wealth Effects: The Stock Market Versus the Housing Market

Karl E. Case, Robert J. Shiller, John M. Quigley

NBER Working Paper No. 8606
Issued in November 2001
NBER Program(s):   EFG

We examine the link between increases in housing wealth, financial wealth, and consumer spending. We rely upon a panel of 14 countries observed annually for various periods during the past 25 years and a panel of U.S. states observed quarterly during the 1980s and 1990s. We impute the aggregate value of owner-occupied housing, the value of financial assets, and measures of aggregate consumption for each of the geographic units over time. We estimate regressions relating consumption to income and wealth measures, finding a statistically significant and rather large effect of housing wealth upon household consumption.

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Document Object Identifier (DOI): 10.3386/w8606

Published: Karl Case & John Quigley & Robert Shiller, 2005. "Comparing Wealth Effects: The Stock Market versus the Housing Market," Advances in Macroeconomics, Berkeley Electronic Press, vol. 5(1), pages 1235-1235.

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