Impact of Housing and Financial Wealth on Household Consumption:Evidence from Micro-Data in China
Using newly released China Health and Retirement Longitudinal Study(CHARLS),this paper explores impact of assets on household consumption in China.The micro-data permits us to analyze the impact of wealth on both durable and non-durable consumption and to compare wealth effects derived from gross versus after-debt measures of financial and housing wealth.The main results show that among homeowners,the housing wealth elasticities are estimated in the range of 0.07-0.09 while the estimated elasticities of consumption spending with respect to financial wealth are smaller in magnitude and are in the range of 0.02.In addition,the wealth effect seems to matter more for younger households,the wealth effect seems to matter more for urban household.Households borrowing capacity play a negligible role in wealth effects.