Study on household mortgage has profound significance to better understand the
economics. This paper finds that the household mortgage plays a positive role on
consumption by examining the data of CFPS in 2018. Using the model that
introduces interaction term, we argue that the mortgage has an income-effect for the
comparatively low interest rate. The empirical result also shows the income-effect
is greater in the “initiative mortgage households”.
JEL classification numbers: G21, D12, D14.
Keywords: Consumption, Household mortgage, CFPS, Income-effect.