Elastic consumption is determined by both the income and wealth effect. However, few studies shed light into the effect of illiquid wealth. In this study, we explore this question by examining the effect of housing wealth on one particular consumption of high elastic, tourism expenditure, in China. By using data from China Family Panel Studies in 2010 and 2012, we find that the change in house prices has a positive and significant effect on tourism expenditure. Particularly, by controlling the income effect, we find that for every 1% increase in house prices, tourism expenditure grew by 0.4%. Moreover, we investigate the crowding out effect of mortgage payments and find that the change in the wealth of households with mortgages has a positive but not significant effect on tourism expenditure. We also note that tourism expenditure does not affect the expenditure on necessities or durable goods, but indeed crowds out expenditure on educational training and other high elastic goods.

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