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Housing Wealth, Financial Wealth and Consumption Expenditure: The Role of Consumer Confidence

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  • Hassan Gholipour Fereidouni

    (Swinburne University of Technology)

  • Reza Tajaddini

    (Swinburne University of Technology)

Abstract

The objective of this paper is to examine the role of consumer confidence on the relationship between two forms of wealth—housing and financial—and four categories of consumption expenditure, which include total consumption, service, durable goods and nondurable goods consumption. This paper uses U.S. quarterly data from 1978 to 2012 for its analysis. Applying the FMOLS estimation method, the results show that consumer confidence has a positive effect on the association between housing wealth and consumption expenditure, whereas its effect on the association between financial wealth and consumption expenditure is negative. The implications of these results are discussed.

Suggested Citation

  • Hassan Gholipour Fereidouni & Reza Tajaddini, 2017. "Housing Wealth, Financial Wealth and Consumption Expenditure: The Role of Consumer Confidence," The Journal of Real Estate Finance and Economics, Springer, vol. 54(2), pages 216-236, February.
    • Handle: RePEc:kap:jrefec:v:54:y:2017:i:2:d:10.1007_s11146-015-9537-9
    DOI: 10.1007/s11146-015-9537-9
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    3. Huijian Han & Zhiming Li & Zongwei Li, 2023. "Using Machine Learning Methods to Predict Consumer Confidence from Search Engine Data," Sustainability, MDPI, vol. 15(4), pages 1-12, February.
    4. Jun Zhang, 2024. "Tourism development and housing price: An interplay," Tourism Economics, , vol. 30(5), pages 1095-1114, August.
    5. Pinar Deniz & Thanasis Stengos, 2023. "Revisiting the Determinants of Consumption: A Bayesian Model Averaging Approach," JRFM, MDPI, vol. 16(3), pages 1-13, March.
    6. Hamid Baghestani & Sehar Fatima, 2021. "Growth in US Durables Spending: Assessing the Impact of Consumer Ability and Willingness to Buy," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 17(1), pages 55-69, April.
    7. Bing Zuo & Zhaoqi Lai, 2020. "The effect of housing wealth on tourism consumption in China: Age and generation cohort comparisons," Tourism Economics, , vol. 26(2), pages 211-232, March.
    8. Liu, Lu & Wang, Qiuyun & Zhang, Anquan, 2019. "The impact of housing price on non-housing consumption of the Chinese households: A general equilibrium analysis," The North American Journal of Economics and Finance, Elsevier, vol. 49(C), pages 152-164.
    9. Jie Chen & William Hardin & Mingzhi Hu, 2020. "Housing, Wealth, Income and Consumption: China and Homeownership Heterogeneity," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(2), pages 373-405, June.
    10. Jingjing Yan, 2018. "The Heterogenous Impact of Fluctuation of Housing Prices upon Consumption of Urban Households in China," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 8(6), pages 1-8.
    11. Silvia Galdi & Anne Maass & Annalisa Robbiani, 2020. "The bright side of pessimism: Promoting wealth redistribution under (felt) economic hardship," PLOS ONE, Public Library of Science, vol. 15(12), pages 1-34, December.
    12. Chi-Wei Su & Xian-Li Meng & Ran Tao & Muhammad Umar, 2023. "Chinese consumer confidence: A catalyst for the outbound tourism expenditure?," Tourism Economics, , vol. 29(3), pages 696-717, May.

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    More about this item

    Keywords

    Housing wealth; Financial wealth; Consumer confidence; Consumption expenditure;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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