wealth effect
noun[S]
ECONOMICSukusthetheorythat when thevalueofassetssuch asgold,shares, andpropertyrises,peoplespendmore:
One of theprimarydriversofspendingby Americanconsumersis thewealtheffectofrisingshareprices.
Examplesofwealth effect
wealth effect
Since fixed-income bond-holders personal wealth (at market rates) has increased, this may stimulate expenditure in awealtheffect.
From
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Wikipedia
This example is from Wikipedia and may be reused under a CC BY-SA license.The increase in private real wealth may give rise to awealtheffectof increased consumption.
FromThis example is from Wikipedia and may be reused under a CC BY-SA license.
Wikipedia
This example is from Wikipedia and may be reused under a CC BY-SA license.This is termed thewealtheffect(compare income effect), and is generally attributed to psychological feelings of confidence one feels rich, so one spends.
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Wikipedia
This example is from Wikipedia and may be reused under a CC BY-SA license.Market participants with overvalued assets tend to spend more because they feel richer (thewealtheffect).
FromThis example is from Wikipedia and may be reused under a CC BY-SA license.
Wikipedia
This example is from Wikipedia and may be reused under a CC BY-SA license.The latter allow to freely scale thewealtheffecton the labor supply.
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Wikipedia
This example is from Wikipedia and may be reused under a CC BY-SA license.It is unclear how if at all this differs from awealtheffecton demand that results directly from the individual's utility maximization problem.
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Wikipedia
This example is from Wikipedia and may be reused under a CC BY-SA license.Moreover, as the marginal rate of substitution is independent of consumption and only depends on the real wage, there is nowealtheffecton the labour supply.
FromThis example is from Wikipedia and may be reused under a CC BY-SA license.
Wikipedia
This example is from Wikipedia and may be reused under a CC BY-SA license.Informally, an agent has quasilinear utility if it can express all its preferences in terms of money and the amount of money it has will not create awealtheffect.
FromThis example is from Wikipedia and may be reused under a CC BY-SA license.
Wikipedia
This example is from Wikipedia and may be reused under a CC BY-SA license.The combined evidence suggests that the shareholders of acquired firms realize significant positive abnormal returns while shareholders of the acquiring company are most likely to experience a negativewealtheffect.
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Wikipedia
This example is from Wikipedia and may be reused under a CC BY-SA license.In addition, the 'wealtheffect' of transfers counteracts the 'freeing-up effect', which implies that per unit of subsidy fewer hectares of tropical forest are protected.
From theCambridge English Corpus
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