Consumption, Housing Market and Demand for Mortgage Finance: Some Crucial Theoretical Discussions towards an Appropriate Model for an Emerging Economy

Abstract

This paper focus on the consumption function theoretical perspective and how this can used to derive suitable models for the demand for mortgage finance. This study will critically examine the various consumption functions in economic science which have been developed over the last century. The review of the various models will focus on the structure, characteristics, variables, data sets and sources that were used and the critical findings of the models. This paper examined existing literature on the consumption functions discussions, identified the critical characteristics from the model and identified the differences among the various consumption model. Furthermore, the consumption functions were linked to the various demand for mortgage financing models in this work. This study spanned the years 1923 through 2023 where these important tools can be vital to the understanding of the various economic cycle and significant instruments for effective decisions regarding investment, monetary and fiscal policy. The periods experienced critical economic shocks such as credit boom, a financial recession, a rebound, and strong economic expansion. In this study piece, a systematic literature review (SLR) was performed, and the research revealed crucial consumption functions analysis to enable this paper identify suitable demand for Mortgage finance model for an emerging economy. A SLR was performed using a sample of 100 research articles chosen from a pool of 400 papers obtained from Scopus, Web of Science, Google Scholar, ABS journal and, among other sources. As a result of the review, the paper recommended a hybrid model that blended the theoretical perspective of consumption functions and relevant characteristics that is suitable for an emerging economy. This model will be useful for mortgage analysts, Credit Managers, Governments and Bankers to implement and enhance the movements in the mortgage market. This will also enhance and assist in facilitating the effective implementation of the Nigerian mortgage finance policy.