In this project, we will test the effects of housing price risk on housing choice and wealth accumulation. Our model predicts that people who live in areas or countries with higher housing price risk should own their first home at a younger age, should live in larger homes, should have less steep housing consumption profiles, and should hold less equity in risky assets such as stocks. We will extend this model to incorporate two additional types of important risks individuals face-- income risk, which is concentrated in the younger phases of the life cycle; and health risk, which is more relevant at older ages. We will also extend our model into the older stages of the life cycle, so that we can examine both theoretically and empirically whether people are willing to downsize to fund their retirement consumption and how this decision is affected by volatile house prices. Finally, we will extend our work to four additional countries--Spain, Italy, Germany, and Canada--that vary considerably in patterns of home ownership and in housing price risk. We will continue to investigate the impact of capital gains in stocks and housing on consumption and savings. Using data from the US and UK, we will be particularly concerned with whether these 'wealth effects' on consumption and savings varied across different types of assets and the extent to which these estimated effects can explain the long-term swing in household savings rates.

Agency
National Institute of Health (NIH)
Institute
National Institute on Aging (NIA)
Type
Method to Extend Research in Time (MERIT) Award (R37)
Project #
5R37AG025529-04
Application #
7422302
Study Section
Social Sciences and Population Studies Study Section (SSPS)
Program Officer
Patmios, Georgeanne E
Project Start
2005-05-15
Project End
2010-04-30
Budget Start
2008-07-01
Budget End
2009-04-30
Support Year
4
Fiscal Year
2008
Total Cost
$282,265
Indirect Cost
Name
Rand Corporation
Department
Type
DUNS #
006914071
City
Santa Monica
State
CA
Country
United States
Zip Code
90401
Lei, Xiaoyan; Shen, Yan; Smith, James P et al. (2017) SIBLING GENDER COMPOSITION'S EFFECT ON EDUCATION: EVIDENCE FROM CHINA. J Popul Econ 30:569-590
Banks, James; Keynes, Soumaya; Smith, James P (2016) Health, Disability and Mortality Differences at Older Ages between the US and England. Fisc Stud 37:345-369
Bloom, David E; Chatterji, Somnath; Kowal, Paul et al. (2015) Macroeconomic implications of population ageing and selected policy responses. Lancet 385:649-657
Kesternich, Iris; Siflinger, Bettina; Smith, James P et al. (2014) The Effects of World War II on Economic and Health Outcomes across Europe. Rev Econ Stat 96:103-118
Zhao, Yaohui; Hu, Yisong; Smith, James P et al. (2014) Cohort profile: the China Health and Retirement Longitudinal Study (CHARLS). Int J Epidemiol 43:61-8
Smith, James P; Tian, Meng; Zhao, Yaohui (2013) Community Effects on Elderly Health: Evidence from CHARLS National Baseline. J Econ Ageing 1-2:
Delaney, Liam; Fernihough, Alan; Smith, James P (2013) Exporting poor health: the Irish in England. Demography 50:2013-35
Banks, James; Smith, James P (2012) International Comparisons in Health Economics: Evidence from Aging Studies. Annu Rev Econom 4:57-81
Delaney, Liam; Smith, James P (2012) Childhood health: trends and consequences over the life course. Future Child 22:43-63
Lei, Xiaoyan; Hu, Yuqing; McArdle, John J et al. (2012) Gender Differences in Cognition among Older Adults in China. J Hum Resour 47:951-971

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