2019/01/01 by Kaas, Kocharkov, Edgar Preugschat · 1 voice · 1 citation
Economics, Econometrics and Finance · #Housing, Finance, and Neoliberalism
paper · doi:10.15609/annaeconstat2009.136.0027
openalex publication_date 2019/01/01 · openalex created_date 2021/02/01 · openalex updated_date 2026/06/17
The recently published Household Finance and Consumption Survey has revealed large differences in wealth inequality between the countries of the Euro area.We find a strong negative correlation between wealth inequality and homeownership rates across countries.We use two decomposition methods to shed more light on this correlation.First, a Gini decomposition by homeownership status shows that the negative relationship is mostly driven by large between-group inequality across owners and renters.Second, to control for other observables, we conduct a detailed counterfactual decomposition of crosscountry inequality differences.We confirm the major role for homeownership rates in accounting for the wealth inequality differences.Our analysis suggests that the cross-country variation is mostly driven by differences in the savings behavior of households in the bottom half of the wealth distribution and that those differences in savings are to a large extent channeled through housing wealth.D31, E21, G11.