March 15, 2006
Households' response to wealth changes; do gains or losses make a difference
Consument schrikt van koersverlies
Press release
De Nederlandse consument reageert aanzienlijk heftiger op een daling van de aandelenkoers dan op een vergelijkbare stijging. De reactie op koersverlies is bijna driemaal groter dan op koerswinst. Voor iedere euro verlies op de aandelenportefeuille worden de besparingen met ruim 20 eurocent opgeschroefd, en de consumptie navenant verminderd.
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We estimate the excess impact of financial asset capital losses relative to gains on household active savings and durable goods consumption in the Netherlands.
The sample period covers both the stock-market boom during the 90's, and the bear period afterwards. The results suggest that households react more to capital losses than to capital gains. Failing to take into account this asymmetry may seriously bias the estimates of the marginal propensity to consume out of wealth.
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Authors
Mauro Mastrogiacomo
R.P. Berben
K. Bernoth