Your house just doubled in value? Don't uncork the champagne just yet!

Wenli Li and Rui Yao present their recent research, which tries to quantify the effects of house-price changes on both consumption and the well-being of American households. Their study looks at the economy as a whole, as well as different demographic groups.Housing - Prices ; Consumption (Economics)

The life-cycle effects of house price changes

The authors develop a life-cycle model to study the effects of house price changes on household consumption and welfare. The model explicitly incorporates the dual feature of housing as both a consumption good and an investment asset and allows for costly adjustments in housing and mortgage positions. Li and Yao's analysis indicates that although house price changes have small aggregate effects, their consumption and welfare consequences on individual households vary significantly. In particular, the non-housing consumption of young and old homeowners is much more sensitive to house price changes than that of middle-aged homeowners. More importantly, while house price appreciation increases the net worth and consumption of all homeowners, it only improves the welfare of middle-aged and old homeowners. Young homeowners and renters are worse off due to higher life-cycle housing consumption costs.Consumption (Economics) ; Saving and investment ; Housing ; Mortgages

Housing over time and over the life cycle: a structural estimation

We estimate a structural model of optimal life-cycle housing and consumption in the presence of realistic labor income and house price uncertainties. The model postulates constant elasticity of substitution between housing service and nonhousing consumption, and explicitly incorporates a house adjustment cost. Our estimation fits the cross-sectional and time-series household wealth and housing profiles from the Panel Study of Income Dynamics quite well, and suggests an intra-temporal elasticity of substitution between housing and nonhousing consumption of 0.33 and a housing adjustment cost that amounts to about 15 percent of house value. Policy experiments with estimated preference parameters imply that households respond nonlinearly to house price changes with large house price declines leading to sizable decreases in both the aggregate homeownership rate and aggregate non-housing consumption. The average marginal propensity to consume out of housing wealth changes ranges from 0.4 percent to 6 percent. When lending conditions are tightened in the form of a higher down payment requirement, interestingly, large house price declines result in more severe drops in the aggregate homeownership rate but milder decreases in nonhousing consumption.

Threshold distribution of equal states for quantitative amplitude fluctuations

Objective. The distribution of equal states (DES) quantifies amplitude fluctuations in biomedical signals. However, under certain conditions, such as a high resolution of data collection or special signal processing techniques, equal states may be very rare, whereupon the DES fails to measure the amplitude fluctuations. Approach. To address this problem, we develop a novel threshold DES (tDES) that measures the distribution of differential states within a threshold. To evaluate the proposed tDES, we first analyze five sets of synthetic signals generated in different frequency bands. We then analyze sleep electroencephalography (EEG) datasets taken from the public PhysioNet. Main results. Synthetic signals and detrend-filtered sleep EEGs have no neighboring equal values; however, tDES can effectively measure the amplitude fluctuations within these data. The tDES of EEG data increases significantly as the sleep stage increases, even with datasets covering very short periods, indicating decreased amplitude fluctuations in sleep EEGs. Generally speaking, the presence of more low-frequency components in a physiological series reflects smaller amplitude fluctuations and larger DES. Significance.The tDES provides a reliable computing method for quantifying amplitude fluctuations, exhibiting the characteristics of conceptual simplicity and computational robustness. Our findings broaden the application of quantitative amplitude fluctuations and contribute to the classification of sleep stages based on EEG data

Zero sequence blocking transformers for multi-pulse rectifier in aerospace applications

The second session of the 109th Congress may well face decisions regarding the preparation of U.S. military forces for stability missions, a broad doctrinal term of which a major subset is peace operations. A November 28, 2005, Department of Defense (DOD) directive that designates stability operations as “core missions” of the U.S. military marks a major shift on the future necessity of performing peacekeeping and related stability operations (also known as stabilization and reconstruction operations)