Abstract
This paper examines the effect of changes in house prices on the saving patterns of households in the United States of America. The paper uses data from the Panel Study of Income Dynamics. Three empirical models are run, one for 2009, one for 2005 and one for 1999 data, to account for differences in household income, age of the head of household, employment status, and mortgage information. The results indicate that whether the home is owned or rented has a significant impact on household savings in each year.
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