Non-Recourse Law, House Prices, and Household Consumption Volatility

2021 ◽  
Author(s):  
Tong-yob Nam ◽  
Seungjoon Oh
Keyword(s):  
House Prices ◽  
Household Consumption ◽  
Consumption Volatility

scholarly journals Household Consumption Volatility and Poverty Risk: Case Studies from South Africa and Tanzania

2020 ◽  
Vol 2020 (051) ◽  
pp. 1
Author(s):  
Roberto Perrelli ◽  
Matthieu Bellon ◽  
Carlo Pizzinelli
Keyword(s):  
South Africa ◽  
Case Studies ◽  
Household Consumption ◽  
Consumption Volatility ◽  
Poverty Risk

scholarly journals The Effect of House Prices on Household Consumption in Italy

2009 ◽  
Vol 39 (3) ◽  
pp. 284-300 ◽  
Author(s):  
R. Calcagno ◽  
E. Fornero ◽  
M. C. Rossi
Keyword(s):  
House Prices ◽  
Household Consumption

Reopening the debate on the relationship among remittances, household consumption stability and economic growth in emerging markets

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dimitar Eftimoski ◽  
Dushko Josheski
Keyword(s):  
Economic Growth ◽  
Generalized Method Of Moments ◽  
Recipient Country ◽  
Household Consumption ◽  
Finite Sample ◽  
Content Type ◽  
Consumption Volatility ◽  
Stabilizing Effect ◽  
The Impact ◽  
The Relationship

PurposeThe impact of remittances on household consumption stability and economic growth is not quite clear. This paper attempts to reopen the debate on the relationship among these three variables. The current remittance literature suggests that a decrease in household consumption volatility, induced by remittances, automatically leads to economic growth. This paper challenges these arguments by stating that, under certain circumstances, there is no automatic relationship among remittances, household consumption stability and growth.Design/methodology/approachThe authors approach the question from the perspective of emerging Central, Eastern and Southeastern European (CESEE) countries. The authors use the two-step system generalized method of moments (GMM) estimator with the Windmeijer (2005) finite-sample correction. To test the existence of the possible non-linear effects of remittances on household consumption stability and economic growth, the authors use threshold regressions.FindingsThe authors find that remittances significantly reduce household consumption volatility. They exhibit a consumption-smoothing effect on recipient households. This stabilizing effect happens not through the preventive role of remittances, but rather through their compensatory role. Remittances produce a weaker stabilizing effect on household consumption when the remittance to GDP ratio of the recipient country is above the estimated threshold level of 4.5%. The authors also find that there is a negatively significant and linear impact of remittances on growth. There is no evidence to suggest that remittances can foster productive investment and therefore promote economic growth in CESEE countries, which means that: (1) the remittances cannot be treated as a source of funds to invest in human and physical capital and (2) the remittances are compensatory rather than profit-oriented.Originality/valueAs far as the authors are aware, this is the first study that investigates the impact of remittances on both household consumption stability and economic growth simultaneously.

scholarly journals Will the Chinese economy be more volatile in the future? Insights from urban household survey data

2019 ◽  
Vol 15 (4) ◽  
pp. 790-808 ◽  
Author(s):  
Jian Yu ◽  
Xunpeng Shi ◽  
James Laurenceson
Keyword(s):  
Economic Growth ◽  
Decomposition Method ◽  
Household Consumption ◽  
Variance Decomposition ◽  
Chinese Government ◽  
Content Type ◽  
Consumption Volatility ◽  
Intertemporal Dynamics ◽  
Consumption Goods ◽  
The Impact

Purpose Consumption volatility is a key source of economic growth volatility; thus, it is an important factor in designing macroeconomic policy. The purpose of this paper is to investigate the factors that determine household consumption volatility, using urban household survey (UHS) data over the period 2002–2009 in 18 provinces in China. Design/methodology/approach Both a traditional variance decomposition method and an advanced variance decomposition method are used. Findings The traditional variance decomposition method suggests that heterogeneity of consumption goods is the key to analyze consumption volatility in China. Consumption of transportation makes the highest aggregate contribution and per-unit volatility in consumption volatility, whereas consumption of food makes the second highest aggregate contribution and the lowest per-unit volatility. Further investigation with the advanced variance decomposition method, which allows the authors to capture intertemporal dynamics and cross-household differences simultaneously, finds that the main factor determining the consumption volatility in China is intertemporal dynamics, rather than cross-household differences. Research limitations/implications Future research could fruitfully explore four issues. First, consumption upgrading has increased the volatility of China’s household consumption. How much will this affect economic growth in China under its “new normal” conditions, and how should the Chinese government respond? Second, differences between UHS data and aggregate data in the calculations of consumption risk sharing need to be investigated. Third, it is important to investigate the channels through which the Chinese government can enhance its ability to spread consumption risks and thus reduce consumer consumption volatility. Finally, further study could extend the current 18 provinces to a nation-wide sample and update the data beyond 2009 to estimate the impact of the global financial crisis. Practical implications The results suggest that when policy makers design macroeconomic policies to smooth consumption volatility, they should consider heterogeneity in household consumption goods, regional disparity and intertemporal dynamics simultaneously. Well-managed volatility of Chinese household consumption can contribute to a stable economic growth in China and the world. Social implications Well-managed volatility of Chinese household consumption can contribute to a stable economic growth in China and the world. Originality/value This paper fills this gap by using China’s UHS data to assess consumption volatility from the perspectives of heterogeneity in household consumption goods, cross-household differences and intertemporal dynamics. We make three contributions to the literature. The first contribution of this paper consists of demonstrating the contributions of heterogeneity in household consumption goods to consumption volatility. The second contribution consists of using the advanced variance decomposition method proposed by Crucini and Telmer (2012). This decomposition methodology allows the authors to examine whether household consumption volatility is due to cross-household differences or intertemporal dynamics. The third contribution is that this paper takes Chinese residents’ consumption fluctuations as the starting point to analyze the impact of consumption fluctuations on the future trend of China’s economy.

scholarly journals International Real Estate Review

2017 ◽  
Vol 20 (1) ◽  
pp. 23-49
Author(s):  
Zan Yang ◽  
◽  
Shuping Wu ◽  
Yanhao Shen ◽  
◽  
...  
Keyword(s):  
Monetary Policy ◽  
House Prices ◽  
Simulation Method ◽  
Household Consumption ◽  
Housing Wealth ◽  
Monetary Policy Transmission ◽  
Policy Changes ◽  
Tier 1 ◽  
Policy Transmission ◽  
Panel Vector Autoregression

This paper studies the relationships among monetary policy, house prices, and consumption in China from both national and regional perspectives. Using a panel vector autoregression (VAR) model and a counterfactual simulation method, we find that monetary policy has a significant effect on consumption but with a regional pattern, in terms of the magnitude and the housing wealth channel. It is found that in the middle southern and the western cities, the monetary policy has strong effects on consumption while the house prices have minimal contribution to the monetary policy transmission to household consumption. By contrast, in the Tier-1 and the eastern cities, house prices play a more important role in monetary policy transmission; even household consumption is less sensitive to monetary policy changes.

House price and household consumption in China: evidence from micro-level data

2020 ◽  
Vol 13 (3) ◽  
pp. 475-501
Author(s):  
Xiaojun Yuan ◽  
Yinjie Shen ◽  
Haigang Zhou
Keyword(s):  
House Prices ◽  
House Price ◽  
Household Consumption ◽  
Data Set ◽  
Vast Number ◽  
Content Type ◽  
Level Data ◽  
Micro Level ◽  
Chinese Housing Market ◽  
The Relationship

Purpose This paper aims to identify how house price affects household consumption. Design/methodology/approach The authors use a micro-level data set that tracks the house price and consumption of a vast number of households over a period of four years. OLS regression is the main econometric method. Findings The authors document robust evidence that an increase in house prices stimulates household consumption, regardless of whether a household owns or rents. Moreover, the authors find that both acquiring and losing homeownership negatively affects household consumption. Further investigation suggests significant regional heterogeneity in the relationship between house prices and household consumption. Originality/value This is one of the first studies examining the relationship between house price and household consumption in China using micro-level data. Given the uniqueness of the Chinese housing market and China’s fast-growing consumption rate, the study contributes new evidence to the long-lasting debate.

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