Paper accepted in The Journal of Finance

Published: 2019-10-04

Kaveh Majlesi has had a paper accepted in The Journal of Finance. The title of the paper is "Stock Market Returns and Consumption” and is co-authored with Marco Di Maggio and Amir Kermani.

The paper employs data on almost the entire universe of Swedish households' stock holdings and imputed consumption to investigate how consumption responds to changes in stock market returns. The authors find that unrealized capital gains lead to a marginal propensity to consume of 23 percent for the bottom 50% of the wealth distribution and about 3 percent for the top 30% of the wealth distribution. Also, households’ consumption is significantly more responsive to dividend payouts across all parts of the wealth distribution.