Wealth Effects of Home-owning Baby-boomers on Consumer Spending (자가 소유 베이비부머의 자산유형별 자산효과 분석)

LEE Hyunjeong (이현정); 윤정득

Wealth Effects of Home-owning Baby-boomers on Consumer Spending

Korea Real Estate Review
2014, 24(2), pp.33-46
Publisher : korea real estate research institute
Research Area : Social Science > Law > Law of Special Parts > Law of Real Estate

LEE Hyunjeong ¹, 윤정득 ²

¹경희대학교
²강남대학교

Accredited

ABSTRACT

As Korean baby boomers started to retire, the age cohort’s retirement is expected to have extensive impacts on both housing and wealth markets. With transforming socioeconomic fabric and changing asset allocation, this research is to assess wealth effects of home-owning baby-boomers on consumer spending. Using the Korean Labor and Income Panel Study, this study identifies 970 households nationwide and seeks to their housing wealth effects on non-durable consumption by age, housing structure type, and debt ratio. The results show that the baby-boomers have high aggregate wealth with high amount of debt, and their consumption elasticity is affected by aggregate wealth value, financial asset, housing property, non-residential property, net wealth and capital gains. Housing wealth effects on the consumption are as equal as those of financial assets, but are twice as high as those of non-residential property. Also, it’s found that the baby-boomers tend to reduce the debt ratio and to raise liquidity in order to afford an adequate standard of living since personal consumption expenditure rises, retirement declines income and alternative income sources are insufficient. The research implies that personal consumption of baby-boomers can’t be simply met by home equity extraction and realized capital gains on housing, so that housing wealth effects won’t produce much impacts on long-run consumption, particularly in times of economic slowdown.

KEYWORDS

wealth effects, baby-boomers, housing wealth, debt ratio, net wealth, capital gains

Citation status

* References for papers published after 2023 are currently being built.

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This paper was written with support from the National Research Foundation of Korea.

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