Non-durable consumption and housing net worth in the Great Recession: Evidence from easily accessible data

By Greg Kaplan, K. Mitman, Giovanni L. Violante. Journal of Public Economics, 2016

120 citations recorded by the source corpus.

In an influential paper, Mian, Rao and Sufi (2013) exploit geographic variation in housing supply elasticities to measure the effect of changes in the housing share of net worth on total household expenditures during the Great Recession. Their widely-cited estimates are based on proprietary house price data, and use new vehicle registrations as the main proxy for total spending. We revisit their study using different, publicly available data on house prices, and an easily-accessible proxy for expenditures in non-durable goods. We re-affirm their findings in our data, and refine their analysis in several dimensions: (i) we separate the roles of falling house prices and initial leverage; (ii) we distinguish the effects on real consumption versus nominal expenditures; and (iii) we infer the implied elasticity of total non-durable expenditures in goods and services to housing net worth.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/e429cbaa61306effcb66c81cf01ec36c97a333f6

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Citations in the corpus

Venting Out: Exports During a Domestic Slump (2018, background): “…in the United States translated into geographical variation in vehicle purchases.25 There is also a broader literature documenting the large impact that housing wealth effects had on consumption more generally in the years around the Great Recession; e.g., Guren et al. (2020), Kaplan et al. (2020).”