The Effect of Home Ownership on the Marginal Propensity to Consume under Various Events
| Autor: | TSAI, LI-FENG, 蔡力豐 |
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| Rok vydání: | 2015 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 103 Using both the macro level data and the micro level data from the Survey of Family Income & Expenditure, this study investigates the effect of home ownership on the household marginal propensity to consume of income. We confirmed that real estate property can be used as a consumption smoothing tool. On household level, we find that the variation of household disposable income is mostly driven by the variation of permanent household characteristics. Therefore, we have to control the characteristics of household structure, time and location. We observed that the marginal propensity to consume of home owners is lower than that of renters after controlling household permanent characteristics, showing a consumption smoothing ability provided by home ownership. Furthermore, we analysed if economic crises can change the smoothing ability of home ownership. Based on total consumption and non-durable consumption, the marginal propensity to consume of home owner is lower than renter during the normal time, but on durable consumption it is reversed. However, during an economic down turn, families who own a house can buffer the negative income shock better, leading to the evidence that home owners have a lower marginal propensity to consume. The evidence is confirmed for the periods of Asia Financial Crisis and Dot-Com Bubble/ Party Alternation, but not of SARS. During SARS, the housing price went down significantly, which dilutes the collateral value of real estate. As a result, fear of foreclosure dominates home owner’s consumption attitude, making their marginal propensity to consume higher than renter. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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