An empirical investigation of changes in asset ownership patterns : microeconomic aspects and macroeconomic consequences
This thesis provides an empirical investigation of the causes and consequences of shifting asset ownership patterns. Chapter 1 analyses the dynamics of the ownership structure of risky asset portfolios. The results show that household portfolio behaviour is better explained by infrequent decisions on their portfolio, rather than continuous adjustments as standard theory predicts. The model shows that there is strong persistence in both risky and safe asset holding decisions since households develop a taste for the assets that they hold and do not change portfolios frequently. Chapter 2 evaluates the increasing exposure of households to risky financial as sets in Europe and the impact of holdings and revaluations of risky assets on consumption, particularly as these are becoming increasingly widely held. The analysis provides evidence of wealth effects in two countries that differ dramatically in their financial structure and capital markets, unlike high frequency studies which have found little such effect. Chapter 3 considers another main household asset, real estate. The chapter looks in depth into the United States housing market and tests the importance of wealth effects resulting from house price movements. I find evidence of strong housing wealth effects that is robust over three different estimation methods that allow for heterogeneity among states.