Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123133
Authors: 
Kaas, Leo
Kocharkov, Georgi
Preugschat, Edgar
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5498
Abstract: 
The recently published Household Finance and Consumption Survey has revealed large differences in wealth inequality between the countries of the Euro area. We find a strong negative correlation between wealth inequality and homeownership rates across countries. We use two decomposition methods to shed more light on this correlation. First, a Gini decomposition by homeownership status shows that the negative relationship is mostly driven by large between-group inequality across owners and renters. Second, to control for other observables, we conduct a detailed counterfactual decomposition of crosscountry inequality differences. We confirm the major role for homeownership rates in accounting for the wealth inequality differences. Our analysis suggests that the cross-country variation is mostly driven by differences in the savings behavior of households in the bottom half of the wealth distribution and that those differences in savings are to a large extent channeled through housing wealth.
Subjects: 
wealth inequality
homeownership
housing
Euro area
JEL: 
D31
E21
G11
Document Type: 
Working Paper

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