@article{ART001795094},
author={Kim, Young-Jin},
title={A Study on the Housing Wealth Effect Change by Household’s Risk Aversion},
journal={Korea Real Estate Review},
issn={2092-5395},
year={2013},
volume={23},
number={2},
pages={95-116}
TY - JOUR
AU - Kim, Young-Jin
TI - A Study on the Housing Wealth Effect Change by Household’s Risk Aversion
JO - Korea Real Estate Review
PY - 2013
VL - 23
IS - 2
PB - korea real estate research institute
SP - 95
EP - 116
SN - 2092-5395
AB - The studies of the housing wealth effect (HWE) concern the relationships between consumption changes and house price appreciation. This paper examines whether HWE is dependent upon households’ attitudes toward risk. Using a model in which the household makes leverage decisions with empirically plausible korea parameter values, HWE is a decreasing function of the households’relative risk aversion.
The effect is positive for less risk averse households, but it can be negative among households who are highly risk averse. In the case of household with no credit constraint, When risk aversion parameter is 0.1, each one million won increase in home value can increase consumption by 88 thousand won. Households with a lower initial loan to value ratio experience greater HWE. This suggests that households who are less credit constraint are more able to mortgage refinancing to fund extra consumption. And grouping households according to their degrees of risk aversion, we estimate the effect of house price growth on consumption growth for each group. The empirical results are consistent with our model prediction. The HWE varies significantly across groups, and it is decreasing in risk aversion.
KW - risk aversion;housing wealth effect;mortgage financing;expected utility;credit constraint
DO -
UR -
ER -
Kim, Young-Jin. (2013). A Study on the Housing Wealth Effect Change by Household’s Risk Aversion. Korea Real Estate Review, 23(2), 95-116.
Kim, Young-Jin. 2013, "A Study on the Housing Wealth Effect Change by Household’s Risk Aversion", Korea Real Estate Review, vol.23, no.2 pp.95-116.
Kim, Young-Jin "A Study on the Housing Wealth Effect Change by Household’s Risk Aversion" Korea Real Estate Review 23.2 pp.95-116 (2013) : 95.
Kim, Young-Jin. A Study on the Housing Wealth Effect Change by Household’s Risk Aversion. 2013; 23(2), 95-116.
Kim, Young-Jin. "A Study on the Housing Wealth Effect Change by Household’s Risk Aversion" Korea Real Estate Review 23, no.2 (2013) : 95-116.
Kim, Young-Jin. A Study on the Housing Wealth Effect Change by Household’s Risk Aversion. Korea Real Estate Review, 23(2), 95-116.
Kim, Young-Jin. A Study on the Housing Wealth Effect Change by Household’s Risk Aversion. Korea Real Estate Review. 2013; 23(2) 95-116.
Kim, Young-Jin. A Study on the Housing Wealth Effect Change by Household’s Risk Aversion. 2013; 23(2), 95-116.
Kim, Young-Jin. "A Study on the Housing Wealth Effect Change by Household’s Risk Aversion" Korea Real Estate Review 23, no.2 (2013) : 95-116.