House Price Shocks, Credit Constraints and Household Indebtedness
Abstract We analyse the effect of housing wealth on household indebtedness in a life-cycle framework. Exploiting longitudinal household data and temporal and geographic variation in house prices, our empirical results indicate that households respond to increases in housing wealth by significantly i...
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| Veröffentlicht in: | Oxford economic papers 2020-07, Vol.72 (3), p.780-803 |
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| container_title | Oxford economic papers |
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| creator | Atalay, Kadir Barrett, Garry F Edwards, Rebecca Yu, Chaoran |
| description | Abstract
We analyse the effect of housing wealth on household indebtedness in a life-cycle framework. Exploiting longitudinal household data and temporal and geographic variation in house prices, our empirical results indicate that households respond to increases in housing wealth by significantly increasing their debt. The effect is strongest for households that are moderately leveraged, highlighting the importance of collateral constraints. Furthermore, we uncover a weaker wealth effect from house price growth for households that have faced negative shocks to income or employment. Importantly, our findings are consistent with the theoretical predictions of the life-cycle model: households increase their mortgage debt, but not their unsecured credit card debt. A novel finding is that we uncover a moderate positive wealth effect on investment loans. |
| doi_str_mv | 10.1093/oep/gpaa017 |
| format | Article |
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We analyse the effect of housing wealth on household indebtedness in a life-cycle framework. Exploiting longitudinal household data and temporal and geographic variation in house prices, our empirical results indicate that households respond to increases in housing wealth by significantly increasing their debt. The effect is strongest for households that are moderately leveraged, highlighting the importance of collateral constraints. Furthermore, we uncover a weaker wealth effect from house price growth for households that have faced negative shocks to income or employment. Importantly, our findings are consistent with the theoretical predictions of the life-cycle model: households increase their mortgage debt, but not their unsecured credit card debt. A novel finding is that we uncover a moderate positive wealth effect on investment loans.</description><identifier>ISSN: 0030-7653</identifier><identifier>EISSN: 1464-3812</identifier><identifier>DOI: 10.1093/oep/gpaa017</identifier><language>eng</language><publisher>Oxford University Press</publisher><subject>2002-2014 ; Australien ; Hypothek ; Immobilienpreis ; Konsumentenverhalten ; Kreditrationierung ; Lebenszyklushypothese ; Permanente Einkommenshypothese ; Privater Haushalt ; Schock ; Schulden ; Wohlfahrtsanalyse</subject><ispartof>Oxford economic papers, 2020-07, Vol.72 (3), p.780-803</ispartof><rights>Oxford University Press 2020. All rights reserved. 2020</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c354t-de40232b615b22d1d95b9bde54d6bc8ed172330b712e7ab7454ff437ac6a661f3</citedby><cites>FETCH-LOGICAL-c354t-de40232b615b22d1d95b9bde54d6bc8ed172330b712e7ab7454ff437ac6a661f3</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><link.rule.ids>314,776,780,1578,27901,27902</link.rule.ids></links><search><creatorcontrib>Atalay, Kadir</creatorcontrib><creatorcontrib>Barrett, Garry F</creatorcontrib><creatorcontrib>Edwards, Rebecca</creatorcontrib><creatorcontrib>Yu, Chaoran</creatorcontrib><title>House Price Shocks, Credit Constraints and Household Indebtedness</title><title>Oxford economic papers</title><description>Abstract
We analyse the effect of housing wealth on household indebtedness in a life-cycle framework. Exploiting longitudinal household data and temporal and geographic variation in house prices, our empirical results indicate that households respond to increases in housing wealth by significantly increasing their debt. The effect is strongest for households that are moderately leveraged, highlighting the importance of collateral constraints. Furthermore, we uncover a weaker wealth effect from house price growth for households that have faced negative shocks to income or employment. Importantly, our findings are consistent with the theoretical predictions of the life-cycle model: households increase their mortgage debt, but not their unsecured credit card debt. A novel finding is that we uncover a moderate positive wealth effect on investment loans.</description><subject>2002-2014</subject><subject>Australien</subject><subject>Hypothek</subject><subject>Immobilienpreis</subject><subject>Konsumentenverhalten</subject><subject>Kreditrationierung</subject><subject>Lebenszyklushypothese</subject><subject>Permanente Einkommenshypothese</subject><subject>Privater Haushalt</subject><subject>Schock</subject><subject>Schulden</subject><subject>Wohlfahrtsanalyse</subject><issn>0030-7653</issn><issn>1464-3812</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2020</creationdate><recordtype>article</recordtype><recordid>eNp90DtLA0EUhuFBFIzRyj8wlY2uOXNPyrAYEwgoqPUyl7NmNe4sM5vCf-_GBOysTvPwwXsIuWZwz2AmJhG7yXtnLTBzQkZMalmIKeOnZAQgoDBaiXNykfMHAEhQZkTmy7jLSJ9T45G-bKL_zHe0TBianpaxzX2yTdtnattAf-kmbgNdtQFdj6HFnC_JWW23Ga-Od0zeFg-v5bJYPz2uyvm68ELJvggogQvuNFOO88DCTLmZC6hk0M5PMTDDhQBnGEdjnZFK1rUUxnpttWa1GJPbw65PMeeEddWl5sum74pBta-vhvrqWD9oetDoY9vkP2u4ATE8ZU9uDiTuun-3fgBnK2XW</recordid><startdate>20200701</startdate><enddate>20200701</enddate><creator>Atalay, Kadir</creator><creator>Barrett, Garry F</creator><creator>Edwards, Rebecca</creator><creator>Yu, Chaoran</creator><general>Oxford University Press</general><scope>OQ6</scope><scope>AAYXX</scope><scope>CITATION</scope></search><sort><creationdate>20200701</creationdate><title>House Price Shocks, Credit Constraints and Household Indebtedness</title><author>Atalay, Kadir ; Barrett, Garry F ; Edwards, Rebecca ; Yu, Chaoran</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c354t-de40232b615b22d1d95b9bde54d6bc8ed172330b712e7ab7454ff437ac6a661f3</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2020</creationdate><topic>2002-2014</topic><topic>Australien</topic><topic>Hypothek</topic><topic>Immobilienpreis</topic><topic>Konsumentenverhalten</topic><topic>Kreditrationierung</topic><topic>Lebenszyklushypothese</topic><topic>Permanente Einkommenshypothese</topic><topic>Privater Haushalt</topic><topic>Schock</topic><topic>Schulden</topic><topic>Wohlfahrtsanalyse</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Atalay, Kadir</creatorcontrib><creatorcontrib>Barrett, Garry F</creatorcontrib><creatorcontrib>Edwards, Rebecca</creatorcontrib><creatorcontrib>Yu, Chaoran</creatorcontrib><collection>ECONIS</collection><collection>CrossRef</collection><jtitle>Oxford economic papers</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Atalay, Kadir</au><au>Barrett, Garry F</au><au>Edwards, Rebecca</au><au>Yu, Chaoran</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>House Price Shocks, Credit Constraints and Household Indebtedness</atitle><jtitle>Oxford economic papers</jtitle><date>2020-07-01</date><risdate>2020</risdate><volume>72</volume><issue>3</issue><spage>780</spage><epage>803</epage><pages>780-803</pages><issn>0030-7653</issn><eissn>1464-3812</eissn><abstract>Abstract
We analyse the effect of housing wealth on household indebtedness in a life-cycle framework. Exploiting longitudinal household data and temporal and geographic variation in house prices, our empirical results indicate that households respond to increases in housing wealth by significantly increasing their debt. The effect is strongest for households that are moderately leveraged, highlighting the importance of collateral constraints. Furthermore, we uncover a weaker wealth effect from house price growth for households that have faced negative shocks to income or employment. Importantly, our findings are consistent with the theoretical predictions of the life-cycle model: households increase their mortgage debt, but not their unsecured credit card debt. A novel finding is that we uncover a moderate positive wealth effect on investment loans.</abstract><pub>Oxford University Press</pub><doi>10.1093/oep/gpaa017</doi><tpages>24</tpages></addata></record> |
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| ispartof | Oxford economic papers, 2020-07, Vol.72 (3), p.780-803 |
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| language | eng |
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| source | Oxford Journals Online |
| subjects | 2002-2014 Australien Hypothek Immobilienpreis Konsumentenverhalten Kreditrationierung Lebenszyklushypothese Permanente Einkommenshypothese Privater Haushalt Schock Schulden Wohlfahrtsanalyse |
| title | House Price Shocks, Credit Constraints and Household Indebtedness |
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