Wealth Effects on Consumption Plans: French Households in the Crisis

This paper analyzes the wealth effect on consumption in France by relying on two original household surveys. First, it provides the first estimate of the marginal propensity to consume out of wealth based on micro data for France (Enqu te Patrimoine 2009, Insee): a low but significant wealth effect is obtained and financial wealth seems to be significant only for stockholders. Second, it studies how French households have adapted their consumption plans during the 2008-2009 crisis by relying on household self-assessed changes in future consumption (survey PATER). Besides the direct wealth effect, our results confirm the role played by changes in expectations on consumption plans, and thus, by the confidence channel as an additional transmission mechanism of the crisis.