The Life-Cycle Effects of House Price Changes

Li, Wenli; Yao, Rui

doi:10.21799/frbp.wp.2005.07

Cited by 68 publications

(79 citation statements)

References 24 publications

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“…It is set at 3 per cent which is a typical rate used in household lifecycle models (Li & Yao, 2007). It is set at 3 per cent which is a typical rate used in household lifecycle models (Li & Yao, 2007).…”

Section: (I) Calibration and Solution Methodsmentioning

confidence: 99%

The Effects of Family Benefits on Childbearing Decisions: A Household Optimising Approach Applied to Australia*

Guest

Parr

2010

Economic Record

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This article analyses the effect of family benefits on childbearing decisions using an intertemporal utility maximising framework. The childbirth decisions of households are planned jointly with decisions about lifecycle consumption. The model is calibrated using data for Australia drawn, where possible, from the Household, Income and Labour Dynamics in Australia Wave 7 survey. The simulations show that changes in family benefits are likely to have both timing and quantum effects on childbirth but of a small magnitude, which tends to support findings using alternative empirical approaches. The simulations also indicate the effects of indirect family benefits, such as paid maternity leave and policies to reduce the time that mothers spend out of the labour force following child birth.

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Section: (I) Calibration and Solution Methodsmentioning

confidence: 99%

The Effects of Family Benefits on Childbearing Decisions: A Household Optimising Approach Applied to Australia*

Guest

Parr

2010

Economic Record

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“…Our modeling strategy extends that of Yao and Zhang () and Li and Yao () by admitting a flexible specification of elasticity of substitution between housing and other consumption.…”

Section: The Model Economymentioning

confidence: 99%

Housing Over Time and Over the Life Cycle: A Structural Estimation

Liu

Yang

et al. 2016

Int Economic Review

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We construct a model of optimal life‐cycle housing and nonhousing consumption and estimate the elasticity between the two goods to be 0.487. The estimate is robust to different assumptions of housing adjustment cost, but sensitive to the choice of sample period and the degree of aggregation of data moments. We then conduct experiments in which house prices and household income fluctuate. Compared with the benchmark, the impact of the shocks on homeownership rates is reduced, but the impact on nonhousing consumption is magnified when housing service and nonhousing consumption are highly substitutable or when the house selling cost is sizable.

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“…4 4 Li and Yao (2007) have a similar moving shock, which helps to capture moves based on factors other than optimal choices regarding house size, in their model. …”

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confidence: 99%

Do House Prices Drive Consumption Growth? The Coincident Cycles of House Prices and Consumption in the Uk

Attanasio

Leicester

Wakefield

2011

Journal of the European Economic Association

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This paper uses a realistic structural lifecycle model of consumption and housing decisions to understand how data might distinguish different mechanisms that explain the correlation between house prices and consumption. The model includes price and earnings shocks estimated from data (the latter including aggregate and idiosyncratic components), and incorporates realistic features of the UK mortgage market. We simulate the model using more than 30 years of realized shocks and under counterfactual scenarios. Our results confirm the intuition of earlier studies: house price shocks should have a larger effect on the consumption of older households and earnings shocks on young households.

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The Life-Cycle Effects of House Price Changes

Cited by 68 publications

References 24 publications

The Effects of Family Benefits on Childbearing Decisions: A Household Optimising Approach Applied to Australia*

The Effects of Family Benefits on Childbearing Decisions: A Household Optimising Approach Applied to Australia*

Housing Over Time and Over the Life Cycle: A Structural Estimation

Do House Prices Drive Consumption Growth? The Coincident Cycles of House Prices and Consumption in the Uk

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