This paper analyses the effect of asset price changes on durable consumption in 11 Central and Eastern European economies from the European Union from 2000Q1 to 2023Q2. Using the method of moments quantile regression for panel data, we find that declines in house prices lead to decreases in durable consumption spending, which are more pronounced among lower-spending households who also show greater sensitivity to stock price declines than higher-spending ones. In contrast, higher-spending households react more prominently to house price increases, underscoring the asymmetric nature of wealth effects. Additionally, monetary and fiscal indicators, such as rising interest rates and public debt, are associated with reduced consumer confidence, further dampening consumption across all durable spending levels. Wealth inequality constrains durable spending, especially in the lower quantiles, while an ageing population slightly boosts consumption in lower expenditure quantiles, reflecting a more cautious approach to spending. These findings highlight the importance of targeted policy measures to stabilise consumption, address wealth inequality, and mitigate the financial vulnerabilities of households at the lower end of the durable spending distribution.
BURDEȚ et al. (Thu,) studied this question.