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Wealth effect

As stocks flag and home prices dip, consumers spend less, spend different

by Matt Levin
Sep 27, 2022
It's called the wealth effect: Household spending decisions tend to be influenced by the ups and downs of asset prices.
Research suggests that feeling pinched financially shifts spending from services to goods, says Stephanie Tully at the University of Southern California.
Anna Moneymaker/Getty Images
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Marketplace Whiteboard®

How feeling rich helps the economy: An explainer

by Paddy Hirsch
Mar 14, 2014
When we feel wealthy, we spend more. It’s called the wealth effect.
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