Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/228235
Authors: 
Garbinti, Bertrand
Lamarche, Pierre
Lecanu, Charlélie
Savignac, Frédérique
Year of Publication: 
2020
Series/Report no.: 
ECB Working Paper No. 2357
Abstract: 
This paper studies the heterogeneity of the marginal propensity to consume out of wealth (MPC) both across and within countries. We estimate the MPC based on a cross-country harmonized household level dataset which combines surveys on wealth, income and consumption. We use panel regressions and an instrumental variable approach. First, our panel-based MPC estimates are very similar to those obtained on aggregate data and show substantial heterogeneity across countries. The wealth effect is coming both from housing and financial assets, while the main asset channel varies between countries. Second, the MPC is higher for low-wealth households, whatever the country. Third, we find some asymmetries across countries regarding the reaction to losses versus gains. Fourth, higher MPC is obtained for the two main consumption expenditure categories. Fifth, we find evidences that housing prices shock decreases consumption inequality while financial wealth shocks have a limited effect on consumption inequality.
Subjects: 
consumption
marginal propensity to consume out of wealth
policy distributiveeffects
household surveys
JEL: 
D12
E21
C21
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-4000-9
Document Type: 
Working Paper

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