Non-Durable Consumption and Real-Estate Prices in Brazil: Panel-Data Analysis at the State Level
Autor(a) principal: | |
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Data de Publicação: | 2019 |
Outros Autores: | , , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Revista Brasileira de Economia (Online) |
Texto Completo: | http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402019000300299 |
Resumo: | Abstract This paper investigates the effect of real-estate prices on non-durable consumption in Brazil. For that, we build a state-level panel of the determinants of non-durable consumption growth during the period 2008-2017. This period covers both a “boom” in real-estate prices and consumption (2008-2014) as well as a “bust” in them (2014-2017). We estimate the effect of house prices on consumption combining the techniques and ideas from Campbell e Cocco (2007) and Case et al. (2005). In particular, we estimated the same reduced-form equation proposed by Campbell e Cocco (2007), which is derived from simulating a theoretical model of housing and consumption choice under debt constraints. Due to Brazilian-data limitations, we were unable to run panel-data regressions at the cohort level (aggregation across households on different surveys) as in Campbell e Cocco (2007). Indeed, we had to resort to data aggregated at the state level to estimate our panel-data regressions as did Case et al. (2005). Our results suggest that changes in house prices significantly affect non-durable consumption in Brazil. The magnitudes are quantitatively close to the effects found for the U.K. by Campbell e Cocco (2007). Furthermore, we document that the effect of house prices on non-durable consumption is asymmetric, stronger in the “bust” than in the “boom” phase of the business cycle. This difference in the effects during different phases of the business cycle suggests that borrowing constraints might explain the effects of house prices on nondurable consumption. |
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Non-Durable Consumption and Real-Estate Prices in Brazil: Panel-Data Analysis at the State LevelReal estatenon-durable consumptionwealthpanel dataAbstract This paper investigates the effect of real-estate prices on non-durable consumption in Brazil. For that, we build a state-level panel of the determinants of non-durable consumption growth during the period 2008-2017. This period covers both a “boom” in real-estate prices and consumption (2008-2014) as well as a “bust” in them (2014-2017). We estimate the effect of house prices on consumption combining the techniques and ideas from Campbell e Cocco (2007) and Case et al. (2005). In particular, we estimated the same reduced-form equation proposed by Campbell e Cocco (2007), which is derived from simulating a theoretical model of housing and consumption choice under debt constraints. Due to Brazilian-data limitations, we were unable to run panel-data regressions at the cohort level (aggregation across households on different surveys) as in Campbell e Cocco (2007). Indeed, we had to resort to data aggregated at the state level to estimate our panel-data regressions as did Case et al. (2005). Our results suggest that changes in house prices significantly affect non-durable consumption in Brazil. The magnitudes are quantitatively close to the effects found for the U.K. by Campbell e Cocco (2007). Furthermore, we document that the effect of house prices on non-durable consumption is asymmetric, stronger in the “bust” than in the “boom” phase of the business cycle. This difference in the effects during different phases of the business cycle suggests that borrowing constraints might explain the effects of house prices on nondurable consumption.Fundação Getúlio Vargas2019-09-01info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersiontext/htmlhttp://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402019000300299Revista Brasileira de Economia v.73 n.3 2019reponame:Revista Brasileira de Economia (Online)instname:Fundação Getulio Vargas (FGV)instacron:FGV10.5935/0034-7140.20190014info:eu-repo/semantics/openAccessDias,Victor PinaDiniz,ÉricaIssler,João VictorRachter,Laísaeng2019-11-22T00:00:00Zoai:scielo:S0034-71402019000300299Revistahttp://bibliotecadigital.fgv.br/ojs/index.php/rbe/issue/archivehttps://old.scielo.br/oai/scielo-oai.php||rbe@fgv.br1806-91340034-7140opendoar:2019-11-22T00:00Revista Brasileira de Economia (Online) - Fundação Getulio Vargas (FGV)false |
dc.title.none.fl_str_mv |
Non-Durable Consumption and Real-Estate Prices in Brazil: Panel-Data Analysis at the State Level |
title |
Non-Durable Consumption and Real-Estate Prices in Brazil: Panel-Data Analysis at the State Level |
spellingShingle |
Non-Durable Consumption and Real-Estate Prices in Brazil: Panel-Data Analysis at the State Level Dias,Victor Pina Real estate non-durable consumption wealth panel data |
title_short |
Non-Durable Consumption and Real-Estate Prices in Brazil: Panel-Data Analysis at the State Level |
title_full |
Non-Durable Consumption and Real-Estate Prices in Brazil: Panel-Data Analysis at the State Level |
title_fullStr |
Non-Durable Consumption and Real-Estate Prices in Brazil: Panel-Data Analysis at the State Level |
title_full_unstemmed |
Non-Durable Consumption and Real-Estate Prices in Brazil: Panel-Data Analysis at the State Level |
title_sort |
Non-Durable Consumption and Real-Estate Prices in Brazil: Panel-Data Analysis at the State Level |
author |
Dias,Victor Pina |
author_facet |
Dias,Victor Pina Diniz,Érica Issler,João Victor Rachter,Laísa |
author_role |
author |
author2 |
Diniz,Érica Issler,João Victor Rachter,Laísa |
author2_role |
author author author |
dc.contributor.author.fl_str_mv |
Dias,Victor Pina Diniz,Érica Issler,João Victor Rachter,Laísa |
dc.subject.por.fl_str_mv |
Real estate non-durable consumption wealth panel data |
topic |
Real estate non-durable consumption wealth panel data |
description |
Abstract This paper investigates the effect of real-estate prices on non-durable consumption in Brazil. For that, we build a state-level panel of the determinants of non-durable consumption growth during the period 2008-2017. This period covers both a “boom” in real-estate prices and consumption (2008-2014) as well as a “bust” in them (2014-2017). We estimate the effect of house prices on consumption combining the techniques and ideas from Campbell e Cocco (2007) and Case et al. (2005). In particular, we estimated the same reduced-form equation proposed by Campbell e Cocco (2007), which is derived from simulating a theoretical model of housing and consumption choice under debt constraints. Due to Brazilian-data limitations, we were unable to run panel-data regressions at the cohort level (aggregation across households on different surveys) as in Campbell e Cocco (2007). Indeed, we had to resort to data aggregated at the state level to estimate our panel-data regressions as did Case et al. (2005). Our results suggest that changes in house prices significantly affect non-durable consumption in Brazil. The magnitudes are quantitatively close to the effects found for the U.K. by Campbell e Cocco (2007). Furthermore, we document that the effect of house prices on non-durable consumption is asymmetric, stronger in the “bust” than in the “boom” phase of the business cycle. This difference in the effects during different phases of the business cycle suggests that borrowing constraints might explain the effects of house prices on nondurable consumption. |
publishDate |
2019 |
dc.date.none.fl_str_mv |
2019-09-01 |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402019000300299 |
url |
http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402019000300299 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
10.5935/0034-7140.20190014 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
text/html |
dc.publisher.none.fl_str_mv |
Fundação Getúlio Vargas |
publisher.none.fl_str_mv |
Fundação Getúlio Vargas |
dc.source.none.fl_str_mv |
Revista Brasileira de Economia v.73 n.3 2019 reponame:Revista Brasileira de Economia (Online) instname:Fundação Getulio Vargas (FGV) instacron:FGV |
instname_str |
Fundação Getulio Vargas (FGV) |
instacron_str |
FGV |
institution |
FGV |
reponame_str |
Revista Brasileira de Economia (Online) |
collection |
Revista Brasileira de Economia (Online) |
repository.name.fl_str_mv |
Revista Brasileira de Economia (Online) - Fundação Getulio Vargas (FGV) |
repository.mail.fl_str_mv |
||rbe@fgv.br |
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1754115905991737344 |