ESSAYS ON HOUSEHOLD CONSUMPTION AND FINANCE

Abstract

This thesis consists of three essays that have the common theme of examining the connection between household consumption/finance choices and macroeconomic performance. The first essay examines how housing consumption and elasticity of housing supply could affect equity risk premium and housing risk premium. It provides both theoretical predictions and empirical evidence for the connection between asset risk premia and elasticity of housing supply. The second essay investigates how the cross-sectional variations of housing supply elasticity have implications on households? portfolio composition. It finds that households living in areas with less elastic housing supply invest more in stocks for the purpose of hedging housing consumption risk. Lastly, the third essay examines competitive consumption and labor supply behavior of young males in China in connection to sex ratio imbalance.