Journal of the Korean housing association (한국주거학회논문집)

The Korean Housing Association (한국주거학회)
권호 표지
DOI QR코드

DOI QR Code

Changing Housing Wealth Effects of Home-owning Baby-boomers in the Seoul Metropolitan Area

수도권 거주 자가소유 베이비부머의 주택자산효과 변화 분석

  • 이현정 (경희대학교 주거환경학과) ;
  • 윤정득 (강남대학교 부동산학과)
  • Received : 2015.03.26
  • Accepted : 2015.05.12
  • Published : 2015.06.25
Download PDF
⟨ Previous Next ⟩

Abstract

The purpose of this research is to analyze the wealth effects of home-owning baby-boomers on household consumption on non-durable goods in the Seoul Metropolitan Area. In so doing, this empirical study utilized the Korean Labor and Income Panel Study (KLIPS) of 2002 and 2012. The statistical findings reveal that household wealth in the period had sharply risen in household income, asset, debt and consumption, and the substantial increase came from growing income and consumption embedded into an expansionary stage of the family life cycle. Further, housing wealth had a much greater effect on consumption expenditure than did financial asset in 2012 while financial wealth effect was larger than housing wealth effect in 2002. Housing wealth effects had become far stronger as the age of the baby-boomer householders increased. As the baby-boomers are close to the retirement stage, post-retirement income security becomes of concern, so that the wealth effect of real estate income as an income alternative for retirees is explicit. The results imply that retirement of baby-boomers is likely to reduce consumer spending, aggravating slowdown of the real economy. Thus, diversification of household asset portfolio in a pre-retirement period is of great significance in maintaining adequate household consumption in later life.

Keywords

References

  1. Ham, J. H. (2001). The Uncertainty of Income and Spending on Durables. Economic Analysis, 7(3), 104-133.
  2. Hwang, W. K. (2011). Diagnosis of Energy in Reserve Assets After Retirement of The Baby Boomer Generation. KB Financial Group Research Institute CEO Report, 2011-17.
  3. HRI (Hyundai Research Institute) (2014). The Factor Analysis of Consumption lag and Economic Effects. Weekly Economic Review, 14-10. Seoul: HRI.
  4. Jeon, I. S. (2013). The housing characteristic research according to lifestyle of baby boom generation. doctor's dissertation, Jeonju University, Jeonju.
  5. Kang, M. K., Choi, M. J., & Kim, J. H. (2009). Empirical Analyses of Housing Wealth Effect in Korea. Journal of the Korea Planners Association, 44(5), 163-173.
  6. Kim, D. S., Roh, Y. K., & An, K. S. (1995). The Principles of Economics. Seoul: Parkyoungsa.
  7. Kim, G. J., & Lee, H. S. (2008). Wealth Effects of Stock and Housing Prices under Uncertainty. The Journal of the Korean Economy, 22(9), 53-79.
  8. Kim, K. A. (2007). Asset Choice of Korean Households. The 8th Korea Labor and Income Panel Conference Proceedings, 561-590.
  9. Kim, K. H. (2002). Urban Economy (3rd ed.). Seoul: Hongmoonsa.
  10. Kim, K-H. (2004). Housing and the Korean Economy. Journal of Housing Economics, 13(4), 321-341 https://doi.org/10.1016/j.jhe.2004.09.001
  11. Kim, K. H. & Kim, J. S. (2013). Economics of Mankiw (6th ed.). Cengage Learning Korea. Inc.
  12. Kim, S. W., Yoon, J. H., Cho, H. S., & Lee, J. H. (2012). A Study on the Social Participation Consumption Expenditures among Older Single-person Households, Journal of the Korean Society of Consumer Studies, 23(4), 309-336.
  13. Kim, Y. J., Lee, S. H., Hong, A. R., Yoon, N. R., & Yu, S. J. (2013). A Study on the Difference of Housing Wealth Effect between Age Group. Journal of the Korean Urban Management Association, 26(20), 19-41.
  14. Lee, H. Y. (2004). Housing Prices Change and Wealth Effects. Finance Economic Research, 181(3). Seoul: The Bank of Korea Institute of Finance Economic Research.
  15. Lee, J. H. (2005). Housing Prices and Consumption. SERI (Samsung Economic Research Institute) Economic Focus, 67, 1-11.
  16. Lehnert, A. (2004). Housing, Consumption, and Credit Constrains. Finance and Economics Discussion Series 2004-63. Washington, DC: Federal Reserve Board.
  17. Lipsey, R. G., Purvis, D. D., & Steiner, P. O. (1988). Economics (6th ed). New York: Harper & Row.
  18. McEachern, W. A. (1988). Economics: A Contemporary Introduction. Cincinnati: South Western Publishing.
  19. Ortalo-Magne, F., & Rady, S. (2006). Housing Market Dynamics: On the Contribution of Income Shocks and Credit Constraints. Review of Economic Studies, 73(255), 459-485. https://doi.org/10.1111/j.1467-937X.2006.383_1.x
  20. Park, C. K., & Lee, Y. (2011). An Analysis of Housing Wealth Effect from Micro Data. The Korea Spatial Planning Review, 68, 135-153. https://doi.org/10.15793/kspr.2011.68..008
  21. Parkin, M. (1999). Economics (5th ed). Boston, MA: Addison-Wesley.
  22. Samuelson, P. A. (1980). Economics (11th ed). New York: McGraw-Hill.
  23. Shefrin, H. M., & Thaler, R. H. (1988). The Behavioral Life-Cycle Hypothesis. Economic Inquiry, 26(4), 609-643. https://doi.org/10.1111/j.1465-7295.1988.tb01520.x
  24. Sierminska, E., & Takhtamanova, Y. (2007). Disentangling the Wealth Effect: Some International Evidence. FRBSF (Federal Reserve Bank of San Francisco) Economic Letter No. 2007-2.
  25. Sim, S. H. (2006). Wealth Effect of Housing Asset on Household Consumption: Using ARDL Bounds Test. Housing Studies Review, 14(3), 133-158.
  26. Skinner, J. (1989). Housing Wealth and Aggregate Saving. Regional Science and Urban Economics, 19(2), 305-324. https://doi.org/10.1016/0166-0462(89)90008-2
  27. Statistics Korea (2015). Korean Statistical Information Service. http://kostat.go.kr/portal/english/index.action
  28. The Bank of Korea (2015). Economic Statistics System. http://ecos.bok.or.kr/
  29. Wang, H., & Hanna, S. (1997). Does Risk Tolerance Decrease with Age? Journal of Financial Counseling and Planning, 8(2), 27-31.