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Int. J. Financial Stud. 2018, 6(2), 57;

Wealth Effects on Household Final Consumption: Stock and Housing Market Channels

Capital Markets Board of Turkey and Middle East Technical University, Eskişehir Yolu 8.Km No:156, Ankara 06530, Turkey
Turkish Treasury, Inonu Blv. No 36 Emek, Ankara 06510, Turkey
SDA Bocconi School of Management, 20136 Milano, Italy
Economics Department, Social Sciences Institute, Dokuz Eylül University, Izmir 35160, Turkey
Author to whom correspondence should be addressed.
Received: 22 December 2017 / Revised: 22 May 2018 / Accepted: 22 May 2018 / Published: 5 June 2018
(This article belongs to the Special Issue Real Estate Finance)
Full-Text   |   PDF [393 KB, uploaded 5 June 2018]


The study primarily explores the linkage between wealth effects, arising from stock and housing market channels, and household final consumption for 11 advanced countries over the period from 1970 Q1 to 2015 Q4. As a modelling strategy, we employ regression analysis through the common correlated effects mean group (CCEMG) estimator, as well as Durbin–Hausman cointegration and Dumitrescu and Hurlin (2012) causality tests. The study provides various pieces of evidence through whole-panel and country-level analyses. In this respect, we find that consumption is mostly explained by income and housing wealth is positively and significantly correlated with consumption. As counter-intuitive evidence, we detect a negative linkage between consumption and stock wealth. The evidence also suggests a long-run cointegration relationship among consumption, income, interest rates, housing wealth, and stock wealth. Moreover, we find bidirectional causality between consumption and income, stock wealth, housing wealth, and interest rates. Overall, the evidence implies that housing wealth, rather than stock wealth, is the primary source of consumption growth in advanced countries. View Full-Text
Keywords: consumption; housing wealth; stock wealth; asset transmission; CCEMG consumption; housing wealth; stock wealth; asset transmission; CCEMG
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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Coskun, Y.; Sencer Atasoy, B.; Morri, G.; Alp, E. Wealth Effects on Household Final Consumption: Stock and Housing Market Channels. Int. J. Financial Stud. 2018, 6, 57.

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