@article{112c6abc94fe48f084f6bcd9f29b2de2,
title = "Making the House a Home: The Stimulative Effect of Home Purchases on Consumption and Investment",
abstract = "We introduce and quantify a new channel through which the housing market affects household spending: the home purchase channel. Households spend on average $8,000 more on home-related durables and home improvements in the 2 years following a home purchase. Expenditures on nondurables and durables unrelated to the home remain unchanged or decrease modestly. The home purchase channel played a substantial role in the Great Recession, accounting for one-third of the decline in spending on home-related durables and home improvements from 2005 to 2010.",
keywords = "D12, E21, E22, G50, R21, PRICES, WEALTH, EQUITY",
author = "Efraim Benmelech and Adam Guren and Melzer, {Brian T.}",
note = "Funding Information: We thank the editor Stijn Van Nieuwerburgh, two anonymous referees, Gadi Barlevy, Susanto Basu, Marty Eichenbaum, Simon Gilchrist, Barney Hartman-Glaser, Michael Reher, Jeremy Stein, and Amir Sufi, and seminar and conference participants at the Federal Reserve Bank of Chicago, Green Line Macro Meeting, Hebrew University, Stanford University, Tel Aviv University, University of California Berkeley Haas School of Business, University of Chicago's Conference on Housing and Macroeconomics, University of Copenhagen's Workshop on New Consumption Data, University of Notre Dame's Roundtable on Housing and Mortgage Markets, and the University of Southern California Lusk Center for Real Estate Symposium. Sasha Indarte, Paolina Medina, and Zhenzhi He provided great research assistance. Benmelech is grateful for financial support from the Guthrie Center for Real Estate Research at the Kellogg School of Management. Publisher Copyright: {\textcopyright} 2022 The Author(s).",
year = "2023",
month = jan,
day = "1",
doi = "10.1093/rfs/hhac041",
language = "English (US)",
volume = "36",
pages = "122--154",
journal = "Review of Financial Studies",
issn = "0893-9454",
publisher = "Oxford University Press",
number = "1",
}