Publication Type
Working Paper
Version
publishedVersion
Publication Date
7-2002
Abstract
Using aggregate consumption data for Singapore, this paper rejects the life-cycle/permanent income and myopia hypotheses as explanations for aggregate consumption behavior. We confirm the presence of liquidity constraints from the asymmetric reaction of consumption to income increases vis-a-vis income declines. When we allow for asymmetric response, anticipated house price increases appear to have a dampening effect on aggregate consumption while declines in expected house price growth also had a negative effect on consumption, although the results are statistically insignificant. There is no evidence that the housing price increases have produced either wealth or collateral enhancement effects on consumption.
Keywords
Housing wealth effects, consumption, Singapore, liquidity constraints, collateral enhancement
Discipline
Asian Studies | Public Economics | Real Estate
Research Areas
Applied Microeconomics
First Page
1
Last Page
21
Publisher
SMU Economics and Statistics Working Paper Series, No. 10-2002
City or Country
Singapore
Citation
PHANG, Sock-Yong.
The Impact of Housing Prices on Aggregate Consumption: Evidence from an East Asian City-State. (2002). 1-21.
Available at: https://ink.library.smu.edu.sg/soe_research/1195
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Included in
Asian Studies Commons, Public Economics Commons, Real Estate Commons