TAILIEUCHUNG - HOUSINGWEALTH, STOCK MARKET WEALTH AND CONSUMPTION: A PANEL ANALYSIS FOR AUSTRALIA

Hence, the value of a European call option is determined by the difference between the current price of the underlying asset and the strike price. If this distance is positive, . if the option is in the money, then the current payoff of the position is positive. In case the strike price is higher than the current stock price, . if the contract is OTM, the value of the call option is still larger than zero, because until maturity, the price difference can become positive. When market participants value option contracts, they use forecasts of the probability of different asset prices for the period. | HOUSING WEALTH STOCK MARKET WEALTH AND CONSUMPTION A PANEL ANALYSIS FOR AUSTRALIA Nikola Dvornak and Marion Kohler Research Discussion Paper 2003-07 July 2003 Economic Research Department Reserve Bank of Australia We wish to thank Ellis Connolly Anthony Richards and seminar participants at the Reserve Bank of Australia and at the Australian National University Canberra for helpful comments and discussions. Mary Cavar and Johann LaBrooy provided much appreciated help with the data. All remaining errors are ours. The views expressed are those of the authors and do not necessarily reflect the views of the Reserve Bank of Australia. Abstract This paper addresses the question of how changes in stock market wealth and housing wealth affect consumption expenditure in Australia. We approach the problem using a panel of Australian states for which we construct data on housing and stock market wealth. We estimate the link between consumption and the components of wealth using panel-data estimation techniques including fixed-effects instrumental variable and panel DOLS estimators. Unlike previous studies we find that both housing wealth and stock market wealth have a significant effect on Australian consumption. We estimate that a permanent increase in households stock market wealth of one dollar increases annual consumption by 6 to 9 cents in the long run while a permanent increase in housing wealth of one dollar is estimated to increase long-run annual consumption by around 3 cents. However given that households housing assets are more than three times as large as stock market assets our estimates imply that a one per cent increase in housing wealth has an effect on aggregate consumption that is at least as large as that of a one per cent increase in stock market wealth. JEL Classification Numbers E21 E44 R31 Keywords consumption housing wealth stock market wealth panel data i Table of Contents 1. Introduction 1 2. Related Literature 2 3. Theoretical Considerations and .

TỪ KHÓA LIÊN QUAN
Đã phát hiện trình chặn quảng cáo AdBlock
Trang web này phụ thuộc vào doanh thu từ số lần hiển thị quảng cáo để tồn tại. Vui lòng tắt trình chặn quảng cáo của bạn hoặc tạm dừng tính năng chặn quảng cáo cho trang web này.