Access to Home Equity and Consumption: Evidence from a Policy Experiment

• 成果类型: Article
• 署名作者: Agarwal, Sumit; Qian, Wenlan
• 署名单位: Georgetown University; National University of Singapore
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/REST_a_00606
• 发表日期: 2017-03
• 页码: 40-52
• 关键词: anticipated income changes; household consumption; consumer response; housing wealth; liquidity constraints; predictable changes; debt response; tax; credit; expenditure

摘要

Using unique consumer financial transactions of more than 56,000 consumers, we study the consumption response to a housing policy experiment in Singapore that resulted in a decrease in access to home equity. Using difference-in-differences analysis, we find a significant negative consumption response to the policy shock. Moreover, the consumption response is concentrated in credit card spending and is stronger among individuals with limited access to credit market or with a high precautionary saving motive. These results suggest that a decrease in access to home equity reduces the role of housing as a self-insurance mechanism for consumption smoothing.