TY  - UNPD
A1  - Kraft, Holger
A1  - Munk, Claus
A1  - Wagner, Sebastian
T1  - Housing habits and their implications for life-cycle consumption and investment
T2  - SAFE working paper series ; No. 85
N2  - We set up and solve a rich life-cycle model of household decisions involving consumption of both perishable goods and housing services, stochastic and unspanned labor income, stochastic house prices, home renting and owning, stock investments, and portfolio constraints. The model features habit formation for housing consumption, which leads to optimal decisions closer in line with empirical observations. Our model can explain (i) that stock investments are low or zero for many young agents and then gradually increasing over life, (ii) that the housing expenditure share is age- and wealth-dependent, (iii) that perishable consumption is more sensitive to wealth and income shocks than housing consumption, and (iv) that non-housing consumption is hump-shaped over life.
T3  - SAFE working paper - 85 
KW  - habit formation
KW  - life-cycle household decisions
KW  - housing expenditure share
KW  - consumption hump
KW  - stock market participation
KW  - renting vs. owning home
KW  - human capital
Y1  - 2015
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/37102
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-371020
UR  - http://ssrn.com/abstract=2568518
IS  - February 18, 2015
PB  - SAFE
CY  - Frankfurt am Main
ER  -