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Wealth Shocks and MPC Heterogeneity / Dimitris Christelis, Dimitris Georgarakos, Tullio Jappelli, Luigi Pistaferri, Maarten van Rooij.
- Format:
- Book
- Author/Creator:
- Christelis, Dimitris.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w25999.
- NBER working paper series no. w25999
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2019.
- Summary:
- We use the responses of a representative sample of Dutch households to survey questions that ask how much their consumption would change in response to unexpected, permanent, positive or negative shocks to their home value. The average MPC is in the 2.1-4.7% range, in line with econometric estimates that use housing wealth and consumption realizations. However, our analysis uncovers significant sample heterogeneity, with over 90% of the sample reporting no consumption adjustment to positive or negative wealth shocks. The relation between the MPC from wealth shocks and cash-on-hand is negative, consistent with models with precautionary saving and liquidity constraints.
- Notes:
- Print version record
- June 2019.
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