Consumption and wealth may co-move because of shifts in credit conditions, interest rates, income expectations or demographics whose impact should be identified to disentangle wealth effects. The findings for France from a 6‑equation model for consumption and the main elements of household portfolios are that marginal propensities to consume financial wealth are comparable to those in the US or the UK, but housing wealth effects are far weaker, and aggregate consumption falls with higher house prices relative to income. This is interpreted as the need for households in France then to save more if they wish to become homeowners or can expect rents to increase in the future. The estimates suggest that during the French house price boom between 1996 and 2008, offsets from the negative effect of higher house prices and higher debt neutralized the positive effects of higher housing wealth and easier credit on consumption, evading the amplifying feedbacks, via consumption, of the US boom.

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Chauvin, V. & Muellbauer, J. (2018). Consumption, household portfolios and the housing market in France. Economie et Statistique / Economics and Statistics, 500-501-502, 157–178.
https://doi.org/10.24187/ecostat.2018.500t.1950