Wealth effect is anything but
Filed Under Main Content · Tagged: Assets, Bank Of Canada, Consecutive Quarter, Economist, First Quarter, Household, Net Worth, Ottawa Citizen, Recession, Royal Bank Of Canada, Statistics Canada, Stock Portfolios, Trillion, Wealth Effect
Ottawa Citizen- There is something about our stock portfolios and homes being worth more that makes us want to spend.
“It’s called the wealth effect. If you feel you have more, you are more willing to spend more,” says David Onyett-Jeffries, an economist with Royal Bank of Canada.
“When people see their house value increase, they are more willing to spend because there is less requirement to save. They view these assets as being marketable and gaining value.”
Statistics Canada said this week that household net worth increased by 1.3% in the first quarter to $6-trillion — a fourth consecutive quarter of improving wealth. Household net worth has recovered 96% of what was lost during the recession…
