HOUSE PRICES AND CONSUMPTION INEQUALITY

• 成果类型: Article
• 署名作者: Etheridge, Ben
• 署名单位: University of Essex
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12404
• 发表日期: 2019
• 页码: 1781-1822
• 关键词: life-cycle; income; WEALTH; equity; variance; DYNAMICS; shocks

摘要

I characterize how house price shocks affect consumption inequality using a life cycle model of housing and nonhousing consumption with incomplete markets. I derive analytical expressions for the dynamics of inequalities and use these to analyze large house prices swings seen in the United Kingdom. I show that movements in consumption inequality were large, that they correspond with the theoretical predictions qualitatively, and that the model explains a large fraction of the movements quantitatively. I demonstrate the accuracy of this analysis using an extended model's full nonlinear solution. Finally, accounting for house price shocks alters estimates of labor-income risks using cross-sectional data.