TY  - JOUR
AU  - Kaplan, Greg
AU  - Mitman, Kurt
AU  - Violante, Giovanni L
TI  - Non-durable Consumption and Housing Net Worth in the Great Recession: Evidence from Easily Accessible Data
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 22232
PY  - 2016
Y2  - May 2016
DO  - 10.3386/w22232
UR  - http://www.nber.org/papers/w22232
L1  - http://www.nber.org/papers/w22232.pdf
N1  - Author contact info:
Greg Kaplan
Department of Economics
University of Chicago
1126 E 59th St
Chicago, IL 60637
E-Mail: gkaplan@uchicago.edu

Kurt Mitman
Institute for International Economic Studies
Stockholm University
106 91 Stockholm
SWEDEN
E-Mail: kurt.mitman@iies.su.se

Giovanni L. Violante
Department of Economics
Princeton University
Julis Romo Rabinowitz Building
Princeton, NJ 08540
E-Mail: violante@princeton.edu
AB  - In an influential paper, Mian, Rao, and Sufi (2013) exploit geographic variation to measure the effect of the fall in housing net worth on household expenditures during the Great Recession. Their widely-cited estimates are based on proprietary house price and proprietary expenditure data and therefore not easily replicable. We use alternative data on a subset of non-durable goods and on house prices, which are more easily accessible, to replicate their study. When estimating their same specification on our data, we obtain values for the elasticity of expenditures to the housing net worth shock that are virtually indistinguishable from theirs. However, our robustness analyses with respect to alternative model specifications yield more nuanced conclusions about the separate roles of house prices and initial housing exposure/leverage for the drop in expenditures. Moreover, the estimated elasticity is consistent, theoretically and quantitatively, with a simple calibrated model with wealth effects where leverage and credit constraints play no role.
ER  -