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ECIN Replication Package for "MPCs of ABCs: The Household Wealth Effects for Affluent Boomers with Credit"

Principal Investigator(s): View help for Principal Investigator(s) Niloy Bose, Virginia Tech; Antu Murshid, University of Wisconsin-Milwaukee

Version: View help for Version V4

Name	File Type	Size	Last Modified
House_data			12/18/2024 05:05:PM

Project Citation:

Bose, Niloy, and Murshid, Antu. ECIN Replication Package for “MPCs of ABCs: The Household Wealth Effects for Affluent Boomers with Credit.” Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2024-12-30. https://doi.org/10.3886/E209536V4

Project Description

Summary: This paper combines exogenous variation in house prices with anonymized individual-level expenditure data to identify a causal channel from housing wealth to consumption. We show that the Sandy Hook school shooting provided a large negative exogenous shock to local housing, which lowered credit card spending by about 4.2 cents for each \$1 fall in house prices: rescaled this translates to an annual marginal propensity to consume (MPC) of about 9 cents on the dollar. These consumption sensitivities are driven entirely by creditworthy middle-aged consumers, with those closest to the retirement threshold reacting the strongest.

Funding Sources: National Science Foundation. Directorate for Social, Behavioral and Economic Sciences (SES-1559405)

Scope of Project

Subject Terms: Housing Wealth Effects; Heterogeneity; Causal Identification

JEL Classification:
E21 Macroeconomics: Consumption; Saving; Wealth

Manuscript Number: ECIN-Jan-2024-0049.R1

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