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Please use this identifier to cite or link to this item: http://bura.brunel.ac.uk/handle/2438/888

Title: Disaggregate wealth and aggregate consumption: An investigation of empirical relationships for the G7
Authors: Byrne, JP
Davis, EP
Keywords: Consumers’ expenditure
Disaggregate household wealth
SURE
Publication Date: 2001
Publisher: Brunel University
Citation: Economics and Finance Working papers, Brunel University, 01-09
Abstract: To date, testing for wealth effects in consumption has mainly used aggregate wealth definitions, and/or is on a single-country basis. This study breaks new ground by analysing disaggregated wealth in consumption functions for G7 countries. Contrary to other empirical work, illiquid financial wealth, (securities, pensions and mortgage debt), tends to be a more significant long-run determinant of consumption than liquid financial wealth. We suggest that this pattern reflects a shift from liquidity constrained to life cycle behaviour following financial liberalisation. Results were robust in SURE analysis, tested in a nested manner, using varying definition of liquid assets and using non-property income instead of personal disposable income. Wald tests indicate similar long-run behaviour for all EU countries including the UK.
URI: http://bura.brunel.ac.uk/handle/2438/888
Appears in Collections:Economics and Finance
Dept of Economics and Finance Research Papers

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