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Seoul Journal of Economics - Vol. 17 , No. 2
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Seoul Journal of Economics - Vol. 17, No. 2, pp. 153-179
Abbreviation: SJE
ISSN: 1225-0279 (Print)
Print publication date 31 May 2004
Received 14 Jan 2004 Revised 26 Oct 2004

Asset Holding and Consumption: Evidence from Japanese Panel Data in the 1990s
Masahiro Hori ; Satoshi Shimizutani
Research Fellow at the Economic and Social Research Institute, Cabinet Office, Government of Japan, 3-1-1, Kasumigaseki, Chiyoda-ku, Tokyo, Japan, Tel: +81-3-3581-9378 (masahiro.hori@cao.go.jp)
Associate Professor of Economics at the Institute of Economic Research, Hitotsubashi University, 2-1, Naka, Kunitachi-shi, Tokyo, Japan, Tel: +81-42-580-8369, Fax: +81-42-580-8333 (sshimizutani@ier.hit-u.ac.jp)

JEL Classification: D12

Abstract

The 1990s crash in Japan’s stock and land market should have had adverse effects on household consumption. This paper takes advantage of a panel data from Japanese households to evaluate impacts of the wealth gains or losses on households’ spending. We find that stockholders’ consumption is responsive to stock market movements while this is not necessarily the case for non-stockholders, suggesting the importance of “direct” wealth effects. Moreover, we observe the MPCs out of stock price and real estate price changes are roughly comparable and estimated to be 0.05 to 0.1 slightly higher than previous estimates using aggregate data.

Keywords: Asset holding, Consumption, Japan, Panel data
Acknowledgments

We thank to the Institute of Household Economy (Kakei-Keizai-Kenkyu-Sho) for providing us micro-level data from the Japanese Panel Survey of Consumption. We are also grateful to anonymous referees and participants at the ESRI seminar at the Cabinet Office. The views expressed in this paper are those of authors and do not necessarily reflect those of the ESRI or of the Japanese Government.

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