Housing costs, house price shocks and savings behaviour among older households in Britain

Disney, Richard; Henley, Andrew; Stears, Gary

doi:10.1016/s0166-0462(01)00086-2

Cited by 38 publications

(46 citation statements)

References 18 publications

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“…There is 3 Especially elderly households: see, for example, Venti and Wise (1990). But see, for the UK, Disney, Henley and Stears (2002). also evidence that households may respond differently to housing shocks which imply nominal wealth losses, as opposed to changes in real prices, although such studies focus primarily on the impact of nominal losses on housing mobility (Engelhardt, 2001;Genosove and Mayer, 2002).…”

Section: Issues and Previous Literaturementioning

confidence: 99%

“…The amount of equity contained in the housing also has an effect on mobility (Genosove and Mayer, 1997). Since mobility is a major source of equity release, this is an important indirect determinant of the impact of housing wealth on consumption, with Disney, Henley and Stears (2002) finding clear differences in financial saving responses to house prices shocks between movers and non-movers among elderly households in the UK. Thus it is important to check estimated results for conditioning on movers versus non-movers, and to investigate selection effects in moving behaviour.…”

Section: Issues and Previous Literaturementioning

confidence: 99%

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House Price Shocks, Negative Equity, and Household Consumption in the United Kingdom

Disney¹,

Gathergood²,

Henley³

2010

Journal of the European Economic Association

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We examine the impact of housing capital gains on savings behaviour during the 1990s British housing market cycle using microdata from the British Household Panel Survey and county-level house price data. We condition the models on household real financial capital gains using Family Resources Survey data. We find a marginal propensity to consume out of housing wealth of between 0.01 and 0.03, depending on specification. Among our novel findings are asymmetric behaviour between periods of house price rises and falls, with stronger consumption response during periods of house price increases, and a disproportionate impact on saving if the household has negative housing equity.

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Section: Issues and Previous Literaturementioning

confidence: 99%

Section: Issues and Previous Literaturementioning

confidence: 99%

House Price Shocks, Negative Equity, and Household Consumption in the United Kingdom

Disney¹,

Gathergood²,

Henley³

2010

Journal of the European Economic Association

Self Cite

116

144

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show abstract

“…As pointed out by numerous authors, high budget shares for housing may also reflect heterogeneity of preferences for housing consumption, savings and wealth [13], that is, they have a preference to spend on housing to obtain better housing quality or are prone to overspend [11,14 -16]. Attempts to improve the measurement of affordability have been made by censoring analysis to lower income earners [17 -20].…”

Section: Measurement Of Housing Affordability Stressmentioning

confidence: 99%

Correlates of housing affordability stress among older Australians

Temple

2008

Australas J Ageing

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“…For example, it is a key variable in decisions such as retirement (Moore and Mitchell 2000;Engen, Gale, andUccelo 1999 and2005;Gustman and Steinmeier 1999;and Lusardi and Mitchell 2007), consumption (Skinner 1989;Case, Quigley, and Shiller 2005;Tang 2006;Agarwal 2007;Campbell and Cocco 2007;and Disney, Gathergood, and Henley 2007), savings (Hoynes and McFadden 1997;Disney, Henley, and Stears 2002;Klyev and Mills 2006;and Juster et al 2005), and the debt composition of the household (Disney, Bridges, and Gathergood 2006). However, since in household surveys 1 See Bucks, Kennickell, and Moore (2006).…”

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confidence: 99%

How Well Do Individuals Predict the Selling Prices of Their Homes?

et al. 2008

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in August 2009Hugo Benítez-Silva acknowledges the financial support of the National Institute on Aging through grant number 5 P01 AG022481-04 for a related project; and, along with Frank Heiland, thanks the Michigan Retirement Research Center for its support on a related project. Sergi Jiménez-Martín acknowledges the financial support of the Spanish Ministry of Education through project number SEJ2005-08783-C04-01. Any remaining errors are the authors'.The Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals.The Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad. More importantly, we are the first to establish a strong correlation between accuracy and the economic conditions at the time of the property's purchase. While most individuals overestimate the value of their property, those who buy during more difficult economic times tend to be more accurate, in some cases even underestimating the value of their house. We find a surprisingly strong, likely permanent, and in many cases long-lived effect of the initial conditions surrounding the purchase of properties, and on how individuals value them. This cyclicality of the overestimation of house prices provides some explanation for the difficulties currently faced by many homeowners, who were expecting large appreciations in home value to rescue them in case of increases in interest rates, which could jeopardize their ability to live up to their financial commitments.

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Housing costs, house price shocks and savings behaviour among older households in Britain

Cited by 38 publications

References 18 publications

House Price Shocks, Negative Equity, and Household Consumption in the United Kingdom

House Price Shocks, Negative Equity, and Household Consumption in the United Kingdom

Correlates of housing affordability stress among older Australians

How Well Do Individuals Predict the Selling Prices of Their Homes?

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