This dissertation consists of three essays on housing and macroeconomics. The first chapter explores the impact of demographic change on housing price using a heterogeneous agent overlapping generations model. The second chapter examines the relationship between the marginal propensity to consume (MPC) and the housing choice. The third chapter presents an empirical analysis regarding the theoretical results derived in Chapter II using two household datasets. How does demographic change affect housing prices? In the first chapter, we address this question by building a dynamic macroeconomic model with a rich housing market structure. The model incorporates the heterogeneity of housing across locations in terms of the distance to the central business district and housing development margin. Given this structure, along with population growth, suburban area is developed while suburban area suffers from demand shortages in the course of population decline. Housing development margin is thus key to capturing the asymmetric house price effect of population boom versus bust. We calibrate the model to Japan's economy, where the population has started to decline, and show that the model captures the changes in housing price distribution during 1980-2015. In the second chapter, we study the marginal propensity to consume (MPC) heterogeneity of households across housing status. We construct a heterogeneous-agent overlapping-generations general equilibrium model with an illiquid and indivisible housing asset. We show that mortgage debtor exhibits high MPC and households about to move to a larger house exhibit low MPC. Indivisible nature of housing and limitation to take equity from housing lead to the results. The third chapter presents empirical estimates of household's heterogeneous marginal propensity to consume. Our Japanese household survey data contains detailed questions on housing choice and proxies for MPC from transitory income. We empirically support our predictions derived in Chapter II. That is, mortgage debtor exhibits high MPC and households about to upgrade their house exhibit low MPC.

Creator

• Matsumura, Kohei

DOI

• https://doi.org/10.21985/n2-ce7p-vw70

Subject

• Economics

Language

• en

Alternate Identifier

• etdadmin_upload_903491
• http://dissertations.umi.com/northwestern:16101

Keyword

• overlapping generation model
• housing
• consumption
• demographics

Date created

• 2022-01-01

Resource type

• Dissertation

Rights statement

• In Copyright