The Journal of Real Estate Finance and Economics

, Volume 29, Issue 3, pp 341–354 | Cite as

Real Estate Versus Financial Wealth in Consumption

  • John D. Benjamin
  • Peter Chinloy
  • G. Donald Jud


The consumption function for the U.S. economy is estimated with real estate and financial wealth for quarterly data for 1952:1–2001:4. An additional dollar of real estate wealth increases consumption by 8 cents in the current year, as compared with only 2 cents for financial wealth. The results are consistent with theoretical bounds on the marginal propensity to consume from aggregate wealth. The decline in the stock market during 2000–2001 had a limited impact on aggregate demand in part because of an offsetting real estate wealth effect.

consumption savings marginal propensity to consume financial assets real estate assets 


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Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  • John D. Benjamin
    • 1
  • Peter Chinloy
    • 1
  • G. Donald Jud
    • 2
  1. 1.Department of Finance and Real Estate, Kogod School of BusinessAmerican UniversityU.S.A
  2. 2.Department of Finance, School of BusinessUniversity of North Carolina–GreensboroGreensboroU.S.A

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