Multi-Horizon Financial and Housing Wealth Effects across the U.S. States

Abstract

We investigate for the presence of multi-horizon wealth effects across U.S. states over the period of 1975:Q2 to 2012:Q2 by utilizing multi-horizon non-causality testing and multi-horizon causality measurement. At the state/aggregate level, we document that housing wealth has more statistically significant and persistent impact on private consumption than financial wealth. We also find that state-level housing/financial wealth effects are present at long time horizons and exhibit heterogeneity across the U.S. From a policy perspective, we suggest that state-level policies may specifically utilize the housing market to support consumption and growth.

Sustainable Real Estate: Management, Assessment and Innovations

“…The paper by Yener Coskun, Christos Bouras, Rangan Gupta and Mark E. Wohar entitled "Multi-Horizon Financial and Housing Wealth Effects across the U.S. States" [7] uses an expanded dataset (period 1975-2012) with regional data to investigate the link between wealth and consumption in the USA. The goal is to better understand the wealth effectinduced household consumption behaviors in the USA and the role of housing and financial wealth effects.…”