RDP 2019-06: The Effect of Mortgage Debt on Consumer Spending: Evidence from Household-level Data Appendix E: Alternate Debt Measures

Fiona Price, Benjamin Beckers and Gianni La Cava

July 2019

Table E1: The Debt Overhang Effect – Mortgage Debt-to-income Ratio
By type of spending
  Model
Non-durables spending 2006–17   Durables spending 2006–10   Total spending 2006–10
OLS FE IV OLS FE IV OLS FE IV
Lagged mortgage debt-to-income ratio >−0.00
(0.89)		 >−0.00
(0.11)		 >−0.00***
(<0.00)		   >−0.00*
(0.07)		 >−0.00
(0.26)		 −0.01***
(<0.00)		   >−0.00
(0.16)		 >−0.00
(0.15)		 >−0.00***
(<0.00)
Income 0.26***
(<0.00)		 0.09***
(<0.00)		 0.07**
(0.02)		   0.95***
(<0.00)		 0.37**
(0.02)		 0.17
(0.39)		   0.29***
(<0.00)		 0.10***
(<0.00)		 0.10**
(0.03)
Lagged home value 0.21***
(<0.00)		 0.17***
(<0.00)		 0.40***
(<0.00)		   0.57***
(<0.00)		 0.25
(0.33)		 1.25***
(<0.00)		   0.26***
(<0.00)		 0.10*
(0.06)		 0.44***
(<0.00)
First-stage: Boom dummy     −69.46***
(<0.00)		       −69.31***
(<0.00)		       −69.31***
(<0.00)
Household FE No Yes No   No Yes No   No Yes No
Postcode FE No No Yes   No No Yes   No No Yes
Observations 21,460 21,460 21,460   6,622 6,622 6,622   6,622 6,622 6,622

Note: See notes to Table 1

Sources: Authors' calculations; HILDA Survey Release 17.0
Table E2: The Debt Overhang Effect – Mortgage Debt-to-assets Ratio
By type of spending
  Model
Non-durables spending 2006–17   Durables spending 2006–10   Total spending 2006–10
OLS FE IV OLS FE IV OLS FE IV
Lagged mortgage debt-to-assets ratio <0.00
(0.12)		 >−0.00
(0.27)		 >−0.00***
(<0.00)		   >−0.00
(0.24)		 >−0.00**
(0.05)		 −0.02***
(<0.00)		   >−0.00
(0.69)		 >−0.00
(0.12)		 −0.01***
(<0.00)
Income 0.25***
(<0.00)		 0.10***
(<0.00)		 0.30***
(<0.00)		   1.01***
(<0.00)		 0.36**
(0.02)		 1.06***
(<0.00)		   0.30***
(<0.00)		 0.09***
(<0.00)		 0.33***
(<0.00)
Lagged home value 0.21***
(<0.00)		 0.16***
(<0.00)		 0.16***
(<0.00)		   0.50***
(<0.00)		 0.16
(0.54)		 0.20
(0.18)		   0.25***
(<0.00)		 0.08
(0.15)		 0.18***
(<0.00)
First-stage: Boom dummy     −14.15***
(<0.00)		       −14.64***
(<0.00)		       −14.64***
(<0.00)
Household FE No Yes No   No Yes No   No Yes No
Postcode FE No No Yes   No No Yes   No No Yes
Observations 21,460 21,460 21,460   6,622 6,622 6,622   6,622 6,622 6,622

Note: See notes to Table 1

Sources: Authors' calculations; HILDA Survey Release 17.0
Table E3: The Debt Overhang Effect – Mortgage Debt-servicing Ratio
By type of spending
  Model
Non-durables spending 2006–17   Durables spending 2006–10   Total spending 2006–10
OLS FE IV OLS FE IV OLS FE IV
Lagged mortgage debt service-to-income ratio >–0.00*
(0.10)		 >–0.00**
(0.01)		 –0.01***
(<0.00)		   >–0.00***
(0.04)		 <0.00
(0.79)		 –0.05***
(<0.00)		   >–0.00**
(0.01)		 >–0.00*
(0.08)		 –0.01***
(<0.00)
Income 0.26***
(<0.00)		 0.10***
(<0.00)		 –0.01
(0.83)		   1.03***
(<0.00)		 0.41***
(0.02)		 0.20
(0.44)		   0.29***
(<0.00)		 0.13***
(<0.00)		 0.07
(0.26)
Lagged home value 0.21***
(<0.00)		 0.17***
(<0.00)		 0.37***
(<0.00)		   0.56***
(<0.00)		 0.18
(0.50)		 0.93***
(<0.00)		   0.26***
(<0.00)		 0.10*
(0.07)		 0.39***
(<0.00)
First-stage: Boom dummy     –4.42***
(<0.00)		       –6.38***
(<0.00)		       –6.38***
(<0.00)
Household FE No Yes No   No Yes No   No Yes No
Postcode FE No No Yes   No No Yes   No No Yes
Observations 19,623 19,623 19,620   5,935 5,935 5,934   5,935 5,935 5,934

Note: See notes to Table 1

Sources: Authors' calculations; HILDA Survey Release 17.0