Intratemporal Nonseparability between Housing and Nondurable Consumption: Evidence from Reinvestment in Housing Stock

Khorunzhina, Natalia (2018): Intratemporal Nonseparability between Housing and Nondurable Consumption: Evidence from Reinvestment in Housing Stock.

Abstract

Using the data on maintenance expenditures and self-assessed house value, I separate the measure of individual housing stock and house prices, and use these data for testing whether nondurable consumption and housing are characterized by intratemporal nonseparability in households' preferences. I find evidence in favor of intratemporal dependence between total nondurable consumption and housing. I reach a similar conclusion for some separate consumption categories, such as food and utility services. My findings also indicate households are more willing to substitute housing and nondurable consumption within a period than to substitute composite consumption bundles over different time periods.

• Item Type: MPRA Paper
• Language: English
• Keywords: Intratemporal Nonseparability, Housing, Nondurable Consumption
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis; D - Microeconomics > D1 - Household Behavior and Family Economics > D13 - Household Production and Intrahousehold Allocation; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R21 - Housing Demand

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