THE IMPACT OF MORTGAGES, HOUSE PRICES AND RENTS ON HOUSEHOLD CONSUMPTION IN THE CZECH REPUBLIC

We empirically investigate the effect of changes in mortgage payments, housing prices and rents on consumption in the Czech Republic. We combine household expenditure survey data with regional data on apartment prices, which results in a unique micro- level dataset. We find that higher real estate prices result in a consumption increase for apartment owners; higher rents imply a consumption reduction for renters.