Why Do Households Concentrate Their Wealth in Housing?
Year: 2004
Type: article
Abstract: An apparent paradox in household wealth accumulation in the United States is the relatively small holding of financial assets and the large holding of housing wealth. To explain the high concentration of household wealth in housing, this paper estimates the marginal propensity to consume from housing and from financial assets. A higher marginal propensity to consume from housing rather than from financial assets would lead households to concentrate their wealth in real estate. For aggregate U.S. quarterly data from 1952:1 to 2002:2, the marginal propensity to consume from housing is higher than that from financial wealth. These conditions provide a rationale for the concentration of household assets in housing.
Source: Journal of Real Estate Research
Authors: John Benjamin, Peter Chinloy, Donald Jud
Language: English
Topic: Housing Market and Economics
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2131674166