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dc.contributor.authorLithell, Markus
dc.date.accessioned2017-08-30T08:18:10Z
dc.date.available2017-08-30T08:18:10Z
dc.date.issued2017
dc.identifier.urihttp://hdl.handle.net/11250/2452321
dc.description.abstractHome equity refinancing played a key role in laying the groundwork for the 2007-2008 financial crisis (Mian and Sufi (2011)). How homeowners spend the money that they withdraw influences how vulnerable they are to financial distress; if the funds go toward consumption instead of reinvestment, household debt increases while assets remain stable. This in turn may have broader financial consequences as the likelihood of mortgage default goes up. However, it is difficult to empirically identify a causal relationship between home equity withdrawal and personal consumption. To address this, I apply an identification strategy using municipal solid waste (MSW) data in a new context. I use two different samples: one of metropolitan statistical areas (MSAs) across the U.S. and another of Florida counties. My results are statistically significant and indicate a positive relationship between house prices and household consumption expenditures, suggesting that if house prices increase by 1%, consumption contemporaneously increases by 0.37% to 0.42%. However, I am unable to confirm a causal relationship. This leaves me to conclude that the increases in consumption and house prices in my sample may be simultaneously driven by some latent factor.nb_NO
dc.language.isoengnb_NO
dc.subjecthousehold financenb_NO
dc.subjecthome equity withdrawalnb_NO
dc.subjectconsumer spendingnb_NO
dc.titleDo household withdraw home equity for cosumption?nb_NO
dc.typeMaster thesisnb_NO
dc.description.localcodenhhmasnb_NO
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