engleski

A NOTE ON HOUSING WEALTH EFFECT IN SELECTED WESTERN BALKAN COUNTRIES

The aim of this study was to explore empirically whether there is a direct housing wealth effect on personal consumption in the long and the short run in selected countries. For that purpose the estimator for nonstationary heterogeneous dynamic panels was employed. Namely, pooled mean group estimator that allows for heterogeneous short-run dynamics and common long-run income and housing wealth is used. The results of the empirical analysis reveal that for the selected group of countries there is statistically significant long-run relationship between consumption, income and housing wealth which is in line with life-cycle theory.

direct housing wealth effect, dynamic panels, pooled mean group estimator, Western Balkan countries

This work has been fully supported by Croatian Science Foundation under the project STatistical Modelling for REspoNse to Crisis and Economic GrowTH in WeStern Balkan Countries –STRENGTHS (No. IP 2013-9402)