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Wealth effect in the US: evidence from the combination of two surveys

Salotti, Simone (2012): Wealth effect in the US: evidence from the combination of two surveys. Published in: The Economic and Social Review , Vol. 1, No. 43 (2012): pp. 67-98.

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Abstract

In this article we investigate the role of wealth in household consumption during the period 1989-2007 using a household-level cross sectional dataset. We combine information from the Consumer Expenditure Survey and the Survey of Consumer Finances to build a detailed dataset for the US for this. We adopt a sample combination procedure which differs considerably from that used earlier by other researchers. When comparing our results with previous research, we find a higher elasticity of consumption with respect to income and a lower elasticity of consumption with respect to both housing wealth and, particularly, to financial wealth.

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