IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v52y2020i56p6145-6161.html
   My bibliography  Save this article

Consumption smoothing and housing capital gains: evidence from Australia, Canada, and New Zealand

Author

Listed:
  • Faruk Balli
  • Thi Thu Ha Nguyen
  • Hatice Ozer Balli
  • Iqbal Syed

Abstract

Using regional level panel data of three developed countries, comprising Australia, Canada, and New Zealand, the study investigates the response of consumption smoothing to housing capital gains. The consumption smoothing model first revisits the theory of perfect risk sharing. After rejecting a full consumption smoothing hypothesis, the results strongly indicate that the appreciation of house values smooths consumption further. For the sake of comparison, analysing three developed economies reveals the diversification in the response of consumption to long-run output shocks. Canadian residents appear to be more sensitive to permanent domestic output shocks while Australian’s consumption pattern remains unchanged.

Suggested Citation

  • Faruk Balli & Thi Thu Ha Nguyen & Hatice Ozer Balli & Iqbal Syed, 2020. "Consumption smoothing and housing capital gains: evidence from Australia, Canada, and New Zealand," Applied Economics, Taylor & Francis Journals, vol. 52(56), pages 6145-6161, December.
    • Handle: RePEc:taf:applec:v:52:y:2020:i:56:p:6145-6161
    DOI: 10.1080/00036846.2020.1784390
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2020.1784390
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2020.1784390?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:52:y:2020:i:56:p:6145-6161. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.