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Housing, Wealth, Income and Consumption: China and Homeownership Heterogeneity
Author(s) -
Chen Jie,
Hardin William,
Hu Mingzhi
Publication year - 2018
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.12245
Subject(s) - consumption (sociology) , economics , real estate , china , marginal propensity to consume , consumer spending , housing tenure , equity (law) , labour economics , wealth effect , permanent income hypothesis , position (finance) , household income , home equity , demographic economics , national wealth , monetary economics , finance , market liquidity , social science , archaeology , sociology , monetary policy , recession , political science , keynesian economics , law , history
Impacts on consumer spending in urban China associated with housing value, housing equity, financial assets and household income are evaluated using longitudinal data from the China Family Panel Studies (CFPS) survey. Findings suggest that the housing wealth effect on household consumption in China is much larger than has been shown for developed economies. The larger impact is prospectively related to structural limits on investing which favor real estate ownership, along with the dominant position of housing in total household wealth. We also find that a household's consumption varies across housing tenure. Homeowners having joint ownership of property on average have the highest consumption propensity, while those having sole ownership of property consume the most in response to appreciation in housing wealth.