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Federal Reserve Bank of San Francisco
Working Paper Series
Wealth effects out of financial and housing wealth: cross country and age group comparisons
Eva Sierminska
Yelena Takhtamanova
Abstract

To explore the link between household consumption and wealth, we use a new source of harmonized microdata (Luxembourg Wealth Study). We investigate whether there are differences in wealth effects from different types of wealth and across age groups. We consider three countries: Canada, Italy and Finland. We find that the overall wealth effect from housing is stronger than the effect from financial wealth for the three countries in the sample. Additionally, in accordance with the life-cycle theory of consumption, we find the housing wealth effect to be significantly lower for younger households. We also find between-country differences in the wealth effect.


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Eva Sierminska & Yelena Takhtamanova, Wealth effects out of financial and housing wealth: cross country and age group comparisons, Federal Reserve Bank of San Francisco, Working Paper Series 2007-01, 2007.
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Keywords: Consumption (Economics) ; Wealth ; Households - Economic aspects
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