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Applying our model to household survey data, we find a structural break in marginal propensities to consume following the end of the housing market boom, with the average across households increasing significantly. There is important heterogeneity by different household balance sheet characteristics, and the increase in the average appears to be driven by higher short\u2010run consumption elasticities for homeowners with low liquid wealth. The change in consumption behavior is consistent with tighter borrowing constraints more than a shift in wealth distributions.<\/jats:p>","DOI":"10.1002\/jae.3016","type":"journal-article","created":{"date-parts":[[2024,1,15]],"date-time":"2024-01-15T07:23:30Z","timestamp":1705303410000},"page":"174-199","update-policy":"https:\/\/doi.org\/10.1002\/crossmark_policy","source":"Crossref","is-referenced-by-count":10,"title":["Did marginal propensities to consume change with the housing boom and bust?"],"prefix":"10.1002","volume":"39","author":[{"given":"Yunho","family":"Cho","sequence":"first","affiliation":[{"name":"Institute for Economic and Social Research Jinan University Guangzhou China"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"James","family":"Morley","sequence":"additional","affiliation":[{"name":"School of Economics University of Sydney Sydney New South Wales Australia"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Aarti","family":"Singh","sequence":"additional","affiliation":[{"name":"School of Economics University of Sydney Sydney New South Wales Australia"}],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"311","published-online":{"date-parts":[[2024,1,14]]},"reference":[{"key":"e_1_2_9_2_1","doi-asserted-by":"crossref","unstructured":"Aguiar M. 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