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We investigate the relationship between housing wealth and consumption using postcode-level variation in house prices and administrative data on new passenger vehicle registrations as a proxy for consumption. We find a robust cross-sectional relationship, and in our preferred specification estimate an elasticity of new passenger vehicle registrations with respect to gross housing wealth of 0.4-0.5, which based on our preferred calibration implies a marginal propensity to consume for total consumption of less than 0.5 cents. Notably, we find evidence that the relationship between house prices and new vehicle registrations is heterogeneous in income.
