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Housing Wealth Effects: Evidence from New Vehicle Registrations

Author

Listed:
  • Christian Gillitzer

    (Reserve Bank of Australia)

  • Jin Cong Wang

    (Reserve Bank of Australia)

Abstract

This article investigates the relationship between housing wealth and consumption using postcode-level variation in housing prices and new passenger vehicle registrations as a proxy for consumption at a postcode level. It is estimated that a one per cent increase in housing wealth is associated with about half a per cent increase in new passenger vehicle registrations – the consumption indicator. But because new vehicle consumption is likely to be particularly sensitive to changes in housing wealth, the results suggest a relatively modest relationship between housing wealth and total consumption.

Suggested Citation

  • Christian Gillitzer & Jin Cong Wang, 2015. "Housing Wealth Effects: Evidence from New Vehicle Registrations," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 13-20, September.
    • Handle: RePEc:rba:rbabul:sep2015-02
    as

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    File URL: https://www.rba.gov.au/publications/bulletin/2015/sep/pdf/bu-0915-2.pdf
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    References listed on IDEAS

    as
    1. Case Karl E. & Quigley John M. & Shiller Robert J., 2005. "Comparing Wealth Effects: The Stock Market versus the Housing Market," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-34, May.
    2. Iacoviello, Matteo, 2004. "Consumption, house prices, and collateral constraints: a structural econometric analysis," Journal of Housing Economics, Elsevier, vol. 13(4), pages 304-320, December.
    3. Nikola Dvornak & Marion Kohler, 2007. "Housing Wealth, Stock Market Wealth and Consumption: A Panel Analysis for Australia," The Economic Record, The Economic Society of Australia, vol. 83(261), pages 117-130, June.
    4. Case, Karl E. & Quigley, John M. & Shiller, Robert J., 2001. "Comparing Wealth Effects: The Stock Market versus The Housing Market," Department of Economics, Working Paper Series qt44k6g6vx, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    5. Christian Gillitzer & Jin Cong Wang, 2015. "Housing Wealth Effects: Cross-sectional Evidence from New Vehicle Registrations," RBA Research Discussion Papers rdp2015-08, Reserve Bank of Australia.
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    Cited by:

    1. Christopher G Gibbs & Jonathan Hambur & Gabriela Nodari, 2018. "DSGE Reno: Adding a Housing Block to a Small Open Economy Model," RBA Research Discussion Papers rdp2018-04, Reserve Bank of Australia.

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