House prices, collateral constraint, and the asymmetric effect on consumption

Chen, Nan Kuang; Chen, Shiu‐Sheng; Chou, Yu Hsi

doi:10.1016/j.jhe.2009.10.003

Cited by 43 publications

(22 citation statements)

References 36 publications

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“…These counterintuitive results have also been critiqued for endogeneity problems embedded in the use of aggregate data (Campbell and Cocco ) and for not controlling for the large amount of heterogeneity in Chinese housing markets (Chen et al . , Zang et al . , Dong et al .…”

Section: Empirical Findingsmentioning

confidence: 99%

Housing, Wealth, Income and Consumption: China and Homeownership Heterogeneity

Chen

Hardin

2018

Real Estate Economics

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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.

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Section: Empirical Findingsmentioning

confidence: 99%

Housing, Wealth, Income and Consumption: China and Homeownership Heterogeneity

Chen

Hardin

2018

Real Estate Economics

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“…We stop after obtaining 3 n impulse response functions with the 5 Chang, Leung (2012a, 2012b) study the housing markets in Singapore and Hong Kong, respectively, in a regime-switching VAR model. Likewise Chen, Chen and Chou (2010) use a threshold model to study the Taiwanese housing market. It turns out that for modeling property prices a nonlinear VAR model often outperforms a linear alternative.…”

Section: A Panel Var Approachmentioning

confidence: 99%

Capital inflows and asset prices: Evidence from emerging Asia

Tillmann

2013

Journal of Banking & Finance

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The withdrawal of foreign capital from emerging countries at the height of the recent financial crisis and its quick return sparked a debate about the impact of capital flow surges on asset markets. This paper addresses the response of property prices to an inflow of foreign capital. For that purpose we estimate a panel VAR on a set of Asian emerging market economies, for which the waves of inflows were particularly pronounced, and identify capital inflow shocks based on sign restrictions. Our results suggest that capital inflow shocks have a significant effect on the appreciation of house prices and equity prices. Capital inflow shocks account for -roughly -twice the portion of overall house price changes they explain in OECD countries. We also address cross-country differences in the house price responses to shocks, which are most likely due to differences in the monetary policy response to capital inflows.

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“…Campbell and Cocco (2004) asserted the impact of house prices on consumption changed across ages, crowds and regions. Chen et al (2010) maintained house market had an asymmetric impact on consumption under unconstrained and constrained regimes.…”

Section: Literature Reviewmentioning

confidence: 99%

A Comparative Analysis on the Wealth Effect between in the Stock Market and in the Housing Market in China

Liu¹,

Shi²

2017

IJEF

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In this article, a threshold cointegration test within the framework of Autoregressive Distributed Lag model suggested by Li and Lee (2010) was employed to quantify the wealth effects in Chinese stock market and domestic housing market. The time-varying features of wealth effects in these two markets were investigated through rolling regression test. The empirical results show that the substitute effect exists in the status of strong market while the wealth effect exists in the status of weak market. It is noteworthy that the wealth effect in the stock market shows an increasing trend while the wealth effect in the housing market reveals a stable trend. The policy implication is that the authority should properly strengthen the regulation in the stock market and curb the rise of housing price when the markets are in the strong status while should increase the disposable income for residents if the markets are in the weak status.

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House prices, collateral constraint, and the asymmetric effect on consumption

Cited by 43 publications

References 36 publications

Housing, Wealth, Income and Consumption: China and Homeownership Heterogeneity

Housing, Wealth, Income and Consumption: China and Homeownership Heterogeneity

Capital inflows and asset prices: Evidence from emerging Asia

A Comparative Analysis on the Wealth Effect between in the Stock Market and in the Housing Market in China

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