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Home Price Expectations and Spending: Evidence from a Field Experiment
Felix Chopra
Christopher Roth
Johannes Wohlfart
蝌蚪网 Review (Forthcoming)
Abstract
We conduct a field experiment with US households to study how expectations about long-run home price growth shape spending decisions. We exogenously vary survey respondents鈥� expectations by providing different expert forecasts. Homeowners鈥� spending, measured using rich home-scanner data, is inelastic to home price expectations. By contrast, renters reduce their spending when expecting higher home price growth. These patterns reflect positive wealth effects for owners from higher future wealth and negative income effects for both groups due to higher future housing costs. Our study highlights consequences of asset price growth and long-term expectations about the economy for household behavior.
