Waxman, Andrew
[VerfasserIn]
;
Liang, Yuanning
[Sonstige Person, Familie und Körperschaft];
Li, Shanjun
[Sonstige Person, Familie und Körperschaft];
Barwick, Panle Jia
[Sonstige Person, Familie und Körperschaft]
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments August 1, 2018 erstellt
Beschreibung:
This paper measures the impact of housing price changes on household consumption at the city level using the universe of credit and debit card transactions in China from 2011 to 2013. In sharp contrast to the literature on the U.S. housing market, our analysis shows a large and negative housing price elasticity of consumption: a 10% increase in housing prices would lead to a 9.1% reduction in non-housing spending. We argue that the negative elasticity is driven by the combination of a strong investment incentive in housing and heavy borrowing constraints faced by households. This is corroborated by the finding that households increase their savings as housing prices increase. Relative to the existing literature, our analysis helps to better explain how low- and middle-income households adapt to the limited investment venues and surging housing prices in the context of persistently high savings rates