TY - RPRT A1 - Ahlfeldt, Gabriel M. A1 - Szumilo, Nikodem A1 - Tripathy, Jagdish T1 - Housing-consumption channel of mortgage demand T2 - Berlin School of Economics Discussion Papers N2 - We quantify the housing-consumption channel in mortgage demand according to which households borrow more following house-price increases since housing and non-housing consumption are imperfect substitutes. To identify this channel, we take a structural approach to mortgage demand and supply, exploiting exogenous variation in house-price growth and a unique dataset with matched transaction- price and mortgage information. We estimate an elasticity of mortgage borrowing to house-prices of 0.82. Counterfactual analysis of the general-equilibrium of housing and mortgage markets shows that, sans housing-consumption channel, mortgage and house-price growth in the UK would have been 50% and 31% lower, respectively, since the 1990s. T3 - Berlin School of Economics Discussion Papers - 44 Y1 - 2024 UR - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:b1570-opus4-55725 UR - https://berlinschoolofeconomics.de/insights/discussion-papers ET - No. 44 ER -