Three essays on wealth effects on the consumption in Korea.
详细信息
文摘
This dissertation contains research on wealth effects in Korea. It is consisted of three chapters and each chapter is summarized below. Chapter I: Financial and housing wealth effect on consumption is investigated using aggregate macro data of Korea for the period of 1986-2009. The long-run marginal propensity of consumption MPC) out of financial wealth is estimated 5.9 cents per one dollar, while that of housing wealth is 2.3 cents. If the sample period was divided into two sub-periods 1986-1998 and 1999-2008), the results for the latter period are somewhat different from those of the whole sample period. The coefficient of housing wealth becomes more significant and sizable in latter period. In regard to the short run dynamics of consumption, the coefficient of error correcting term shows the significant minus sign as expected. This implies that the disequilibrium from the long-run trend is corrected and returned to the long run relationship. Additionally, the estimation with dummy variable of business cycle reveals that the effect of income growth on consumption growth is larger in recession period than in the expansion period. Finally, the wealth effects among different income groups dont seem to be same, and the only stock market wealth for the highest income group positively affects short-run consumption. Chapter II : Using a micro dataset from Korea, the link between household consumption and wealth housing and financial wealth) is examined. The empirical results show that the overall wealth effect from housing is greater than the effect from financial wealth over the sample period. Furthermore, consistent with previous literature, demographic variables such as age, education and living areas etc., are found to be significant. In accordance with the life-cycle theory of consumption, the housing wealth effects of older households are significantly higher than that of young households. The households that are more educated and reside in metro cities have greater elasticities of wealth on the consumption than others. Chapter III:This paper investigates the elderly housing behavior in Korea based on the life-cycle theory using a micro dataset of 2006. The main concerns are what determine their downsizing of residence. In Korea, homeownership does not decline steeply with age, through age 70 and the households over 65 in the ten-year horizon dont prefer to downsize their ownerships. However, the downsizing of housing spaces without changing tenure status is observed in most of older age groups over 50. Meanwhile the higher income and wealthier with non-financial wealth) households are less likely to downsize housing spaces as well as their homeownerships. The noticeable finding is that the financial wealth is positively related to the downsizing of housing spaces, which may be due to the substitutive relationships between housing and financial wealth.