House Price Shocks, Credit Constraints and Household Indebtedness

Atalay, Kadir; Barrett, Garry F.; Edwards, R. W.; Yu, Chaoran

doi:10.1093/oep/gpaa017

Cited by 11 publications

(5 citation statements)

References 35 publications

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“…Our results showed that the employed and self-employed household members showed decrease in household wealth. Households that suffered from negative income shocks or unemployment showed a weaker effect from house price growth (Atalay et al, 2020). In addition to employment status, the field of employment of the household's head and education are also important determinants of financial vulnerability (Ali, Khan and Ahmad, 2020).…”

Section: Empirical Findings and Discussionmentioning

confidence: 99%

“…Moreover, income is intricately linked to household members' employment status, which affects the level of indebtedness. Temporary employment contracts and unemployment increase financial vulnerability, but a stable job increases the likelihood of savings and lowers the financial vulnerability of households (Atalay et al, 2020;Ali, Khan and Ahmad, 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

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The Relationship between Household Wealth and Financial Vulnerability in the Post-communist Countries of the Euro Area

Buleca¹,

šubová²,

Maličká³

2022

ekoncas

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The paper investigates the relationship between household wealth and financial vulnerability in the euro area member countries using data from the European Union Household Finance and Consumption Survey (HFCS). The instrumental variable regression model based on the two-stage least square method was used to elicit the role of household financial vulnerability in wealth accumulation. To consider different historical development and implementing social policies, the analysis considers the household location (post-communist countries according to the Warsaw Treaty and other European countries with a core in Western Europe). The analysis results emphasise the positive relationship between households' wealth accumulation and financial vulnerability represented by household indebtedness. Additional variables reflecting the households' socio-economic and demographic characteristics are statistically significant, too. Debt service-to-income ratio, statuses of employment (employed and self-employed), and age of the reference person squared were driving forces of wealth accumulation, while age of the reference person, number of dependent children, employment status (retired, other), and geographical location lower the level of household wealth.

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Section: Empirical Findings and Discussionmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

The Relationship between Household Wealth and Financial Vulnerability in the Post-communist Countries of the Euro Area

Buleca¹,

šubová²,

Maličká³

2022

ekoncas

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“…The literature also suggests important factors that delay ownership may be associated with long-run changes in economic and social outcomes. Research show that house prices and tenure status have significant impacts on labour supply, consumption, indebtedness, and the health and fertility decisions of Australians (Atalay and Edwards 2022; Atalay, Barrett et al 2020;Atalay, Edwards et al 2017;Atalay, Li et al 2021;Atalay, Whelan et al 2017;Eccleston, Verdouw et al 2018). Hence, analysing how housing market conditions are associated with differences in home ownership is important for understanding broad economic and demographic trends in Australia.…”

Section: Literature Reviewmentioning

confidence: 99%

Transitions into home ownership: a quantitative assessment

Whelan¹,

Atalay²,

Barrett³

et al. 2023

AHURI Final Report

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Related reports and documentsInquiry into financing first home ownership: opportunities and challenges https://www.ahuri.edu.au/research-in-progress/Inquiry-intofinancing-first-home-ownership-opportunities-and-challenges AHURI AHURI is a national independent research network with an expert not-for-profit research management company, AHURI Limited, at its centre. AHURI's mission is to deliver high quality research that influences policy development and practice change to improve the housing and urban environments of all Australians.Using high quality, independent evidence and through active, managed engagement, AHURI works to inform the policies and practices of governments and the housing and urban development industries, and stimulate debate in the broader Australian community. AHURI undertakes evidence-based policy development on a range of priority policy topics that are of interest to our audience groups, including housing and labour markets, urban growth and renewal, planning and infrastructure development, housing supply and affordability, homelessness, economic productivity, and social cohesion and wellbeing. AHURI Limited also gratefully acknowledges the contributions, both financial and in-kind, of its university research partners who have helped make the completion of this material possible. DisclaimerThe opinions in this report reflect the views of the authors and do not necessarily reflect those of AHURI Limited, its Board, its funding organisations or Inquiry Panel members. No responsibility is accepted by AHURI Limited, its Board or funders for the accuracy or omission of any statement, opinion, advice or information in this publication. AHURI journalAHURI Final Report journal series is a refereed series presenting the results of original research to a diverse readership of policy makers, researchers and practitioners. Peer review statementAn objective assessment of reports published in the AHURI journal series by carefully selected experts in the field ensures that material published is of the highest quality. The AHURI journal series employs a double-blind peer review of the full report, where anonymity is strictly observed between authors and referees.

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“…For example, people might move to a low inequality neighbourhood with the aim to reduce their debts. I follow Atalay et al (2020)…”

Section: Robustness Checksmentioning

confidence: 99%

Do Australian Households Borrow to Keep up with the Joneses?

Nguyen¹

2022

RBA Research Discussion Papers

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I examine whether and how local income inequality affects household debt and its composition using household panel data for Australia from the Household, Income and Labour Dynamics in Australia Survey. I find that middle-income households without liquidity and credit constraints tend to borrow more for non-residential investment purposes as local income inequality rises, suggesting that they are trying to close the income gap. They also appear to try to close the consumption gap by accumulating more car debt with a rise in local income inequality. Both findings are consistent with households 'keeping up with the Joneses', but unlikely to have implications for macrofinancial stability given that households taking on debt appear well resourced.

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House Price Shocks, Credit Constraints and Household Indebtedness

Cited by 11 publications

References 35 publications

The Relationship between Household Wealth and Financial Vulnerability in the Post-communist Countries of the Euro Area

The Relationship between Household Wealth and Financial Vulnerability in the Post-communist Countries of the Euro Area

Transitions into home ownership: a quantitative assessment

Do Australian Households Borrow to Keep up with the Joneses?

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