IDEAS home Printed from https://ideas.repec.org/p/bok/wpaper/2027.html
   My bibliography  Save this paper

Consumption Dynamics and a Home Purchase

Author

Listed:
  • Dongjae Jung

    (Economic Research Institute, Bank of Korea)

Abstract

This paper investigates the effects of a home purchase, which is one type of durable expenditure, on changes in non-durable consumption at the household level. The results suggest that there is a break on the consumption path at the time of a home purchase; non-durable consumption in the after-period of a home purchase is 5.2% higher than the before-period. The results propose an extra path that connects the two cycles of housing markets and consumption by suggesting that home purchases trigger not only additional home-related durable spendings, but also release delayed consumption.

Suggested Citation

  • Dongjae Jung, 2020. "Consumption Dynamics and a Home Purchase," Working Papers 2020-27, Economic Research Institute, Bank of Korea.
    • Handle: RePEc:bok:wpaper:2027
    as

    Download full text from publisher

    File URL: https://www.bok.or.kr/ucms/cmmn/file/fileDown.do?menuNo=500789&atchFileId=FILE_000000000020872&fileSn=1
    File Function: Working Paper, 2020
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Efraim Benmelech & Adam Guren & Brian T Melzer & Stijn Van, 2023. "Making the House a Home: The Stimulative Effect of Home Purchases on Consumption and Investment," The Review of Financial Studies, Society for Financial Studies, vol. 36(1), pages 122-154.
    2. Krumm, Ronald & Kelly, Austin, 1989. "Effects of homeownership on household savings," Journal of Urban Economics, Elsevier, vol. 26(3), pages 281-294, November.
    3. Ben Jann, 2014. "Plotting regression coefficients and other estimates," Stata Journal, StataCorp LP, vol. 14(4), pages 708-737, December.
    4. Artle, Roland & Varaiya, Pravin, 1978. "Life cycle consumption and homeownership," Journal of Economic Theory, Elsevier, vol. 18(1), pages 38-58, June.
    5. Ben Jann, 2014. "A new command for plotting regression coefficients and other estimates," German Stata Users' Group Meetings 2014 09, Stata Users Group.
    6. Michael Carlos Best & Henrik Jacobsen Kleven, 2018. "Housing Market Responses to Transaction Taxes: Evidence From Notches and Stimulus in the U.K," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(1), pages 157-193.
    7. Orazio P. Attanasio, 2000. "Consumer Durables and Inertial Behaviour: Estimation and Aggregation of (S, s) Rules for Automobile Purchases," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 667-696.
    8. Jappelli, Tullio & Pistaferri, Luigi, 2017. "The Economics of Consumption: Theory and Evidence," OUP Catalogue, Oxford University Press, number 9780199383153.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zsuzsa Lábiscsák-Erdélyi & Ilona Veres-Balajti & Annamária Somhegyi & Karolina Kósa, 2022. "Self-Esteem Is Independent Factor and Moderator of School-Related Psychosocial Determinants of Life Satisfaction in Adolescents," IJERPH, MDPI, vol. 19(9), pages 1-14, May.
    2. Graml, Regine & Hagen, Tobias & Ziegler, Yvonne & Khachatryan, Kristine & Herman, Ricky Astrida, 2020. "Lesbische Frauen in der Arbeitswelt: The L-Word in Business," Working Paper Series 15, Frankfurt University of Applied Sciences, Faculty of Business and Law.
    3. David Roodman, 2022. "Schooling and Labor Market Consequences of School Construction in Indonesia: Comment," Papers 2207.09036, arXiv.org, revised Mar 2024.
    4. Rambotti, Simone, 2020. "Is there a relationship between welfare-state policies and suicide rates? Evidence from the U.S. states, 2000–2015," Social Science & Medicine, Elsevier, vol. 246(C).
    5. Latikka, Rita & Koivula, Aki & Oksa, Reetta & Savela, Nina & Oksanen, Atte, 2022. "Loneliness and psychological distress before and during the COVID-19 pandemic: Relationships with social media identity bubbles," Social Science & Medicine, Elsevier, vol. 293(C).
    6. Lars Müller & Daniel Klein, 2023. "Social Inequality in Dropout from Higher Education in Germany. Towards Combining the Student Integration Model and Rational Choice Theory," Research in Higher Education, Springer;Association for Institutional Research, vol. 64(2), pages 300-330, March.
    7. Li, Jianghong & Bünning, Mareike & Kaiser, Till & Hipp, Lena, 2022. "Who suffered most? Parental stress and mental health during the COVID-19 pandemic in Germany [Wer leidet am stärksten? Erziehungsstress und psychische Belastungen bei Eltern während der COVID-19 Pa," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 34(1), pages 281-309.
    8. Jalini Kaushalya Galabada, 2022. "Towards the Sustainable Development Goal of Zero Hunger: What Role Do Institutions Play?," Sustainability, MDPI, vol. 14(8), pages 1-25, April.
    9. Isaac F. Megbolugbe & Peter D. Linneman, 1993. "Home Ownership," Urban Studies, Urban Studies Journal Limited, vol. 30(4-5), pages 659-682, May.
    10. Diriwaechter, Patric & Shvartsman, Elena, 2018. "The anticipation and adaptation effects of intra- and interpersonal wage changes on job satisfaction," Journal of Economic Behavior & Organization, Elsevier, vol. 146(C), pages 116-140.
    11. Auspurg, Katrin & Schneck, Andreas & Thiel, Fabian, 2020. "Different samples, different results? How sampling techniques affect the results of field experiments on ethnic discrimination," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 0.
    12. Renee Luthra & Lucinda Platt, 2021. "Are UK immigrants selected on education, skills, health and social networks?," RF Berlin - CReAM Discussion Paper Series 2103, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    13. Liu, Meijun & Jaiswal, Ajay & Bu, Yi & Min, Chao & Yang, Sijie & Liu, Zhibo & Acuña, Daniel & Ding, Ying, 2022. "Team formation and team impact: The balance between team freshness and repeat collaboration," Journal of Informetrics, Elsevier, vol. 16(4).
    14. Bhutta, Neil & Ringo, Daniel, 2021. "The effect of interest rates on home buying: Evidence from a shock to mortgage insurance premiums," Journal of Monetary Economics, Elsevier, vol. 118(C), pages 195-211.
    15. Xiao Yu & Shu Liu, 2022. "Disparities in Online Use Behaviours and Chinese Digital Inclusion: A 10-Year Comparison," IJERPH, MDPI, vol. 19(19), pages 1-21, September.
    16. Vitus Püttmann & Jens Ruhose & Stephan L. Thomsen, 2023. "Academics’ Attitudes Toward Engaging in Public Discussions: Experimental Evidence on the Impact of Engagement Conditions," Research in Higher Education, Springer;Association for Institutional Research, vol. 64(5), pages 765-788, August.
    17. Jonathan S. Skinner, 1994. "Housing and Saving in the United States," NBER Chapters, in: Housing Markets in the United States and Japan, pages 191-214, National Bureau of Economic Research, Inc.
    18. Mary F. Evans & Scott M. Gilpatric & Jay P. Shimshack, 2018. "Enforcement Spillovers: Lessons from Strategic Interactions in Regulation and Product Markets," Journal of Law and Economics, University of Chicago Press, vol. 61(4), pages 739-769.
    19. Swagata Bhattacharjee, 2019. "Delegation Using Forward Induction," Working Papers 17, Ashoka University, Department of Economics.
    20. Joseph Coll, 2022. "Waiting to vote safely: How Covid‐19 safety measures shaped in‐person voter wait times during the 2020 election," Social Science Quarterly, Southwestern Social Science Association, vol. 103(2), pages 380-398, March.

    More about this item

    Keywords

    Consumption; Home Purchase;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

    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:bok:wpaper:2027. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Economic Research Institute (email available below). General contact details of provider: https://edirc.repec.org/data/imbokkr.html .

    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.