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Updating on Housing Wealth and Consumption in Sweden

Shen, Yue LU (2017) NEKH02 20171
Department of Economics
Abstract
Using the most recent data from 1996 to 2016, I examine the more current relationship between housing wealth and private consumption. I extend the Life-Cycle Hypothesis and separate wealth into housing wealth from financial wealth. The main method em-ployed is the Engle-Granger two-step method. Combined with the use of quarterly data, the method allows investigation of the long-term and short-term effects in one methodological framework. Several modifications of a baseline model are tested and compared in search for the best model. The results reinforce the findings of previous studies, that housing wealth has a substantial effect on consumption. The exact estimates may vary depending on the choice of theory and methodology. Nevertheless a... (More)
Using the most recent data from 1996 to 2016, I examine the more current relationship between housing wealth and private consumption. I extend the Life-Cycle Hypothesis and separate wealth into housing wealth from financial wealth. The main method em-ployed is the Engle-Granger two-step method. Combined with the use of quarterly data, the method allows investigation of the long-term and short-term effects in one methodological framework. Several modifications of a baseline model are tested and compared in search for the best model. The results reinforce the findings of previous studies, that housing wealth has a substantial effect on consumption. The exact estimates may vary depending on the choice of theory and methodology. Nevertheless a considerable effort was made on data selection to ensure that the estimates can provide a reliable update on the relationship, which could be useful for economists and politicians alike. (Less)
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author
Shen, Yue LU
supervisor
organization
course
NEKH02 20171
year
type
M2 - Bachelor Degree
subject
keywords
Life-Cycle Hypothesis, Engle-Granger, consumption, wealth, house prices
language
English
id
8910006
date added to LUP
2017-07-11 11:37:04
date last changed
2017-07-11 11:37:04
@misc{8910006,
  abstract     = {Using the most recent data from 1996 to 2016, I examine the more current relationship between housing wealth and private consumption. I extend the Life-Cycle Hypothesis and separate wealth into housing wealth from financial wealth. The main method em-ployed is the Engle-Granger two-step method. Combined with the use of quarterly data, the method allows investigation of the long-term and short-term effects in one methodological framework. Several modifications of a baseline model are tested and compared in search for the best model. The results reinforce the findings of previous studies, that housing wealth has a substantial effect on consumption. The exact estimates may vary depending on the choice of theory and methodology. Nevertheless a considerable effort was made on data selection to ensure that the estimates can provide a reliable update on the relationship, which could be useful for economists and politicians alike.},
  author       = {Shen, Yue},
  keyword      = {Life-Cycle Hypothesis,Engle-Granger,consumption,wealth,house prices},
  language     = {eng},
  note         = {Student Paper},
  title        = {Updating on Housing Wealth and Consumption in Sweden},
  year         = {2017},
}