Analysis shows that the asset effect of rising domestic stock prices on consumption is only 1.3%. In other words, when stock prices rise by 10,000 won, households increase their consumption by only about 130 won. Considering that the asset effect in advanced economies such as the United States and Europe is around 3–4%, the effect in Korea is assessed to be relatively low in terms of boosting domestic demand.

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On May 7, the Bank of Korea released a report titled "BOK Issue Note: Assessment of Stock Asset Effects in Korea." The report was authored by Kim Minsoo, Deputy Director of the Macroeconomic Analysis Team at the Bank's Research Department, together with researchers Chu Seongyun and Kwak Beopjun.

The research team estimated Korea's stock asset effect by analyzing consumption and stock asset data from the Household Financial Welfare Survey panel. As a result, the asset effect for the period 2012–2024 was found to be about 1.3%. This means that for every 10,000 won increase in stock prices, approximately 130 won was used as a source of household consumption.

In advanced economies such as Europe and the United States, about 3–4% of capital gains from rising stock prices translate into increased consumption. In contrast, the asset effect of stocks in Korea was found to be relatively smaller. Even Japan's asset effect stands at 2.2%, higher than Korea's.

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The report identified the relatively small scale of stock assets in Korea and their concentration among high-income and high-asset households as primary reasons for the low asset effect. In fact, as of 2024, the size of stock assets relative to disposable income among Koreans stands at 77.3%, which is significantly lower than the United States (255.6%) and major European countries (183.9%). Stock assets are also concentrated among groups with lower consumption propensity—high-income (64.5%) and high-asset households (73.2%).

Another finding is that the historically low expected returns on domestic stocks have limited the expansion of consumption. Due to low returns and high volatility, gains from stocks are often seen as temporary events that could quickly be reversed, rather than as permanent income, making people less inclined to increase consumption. From 2011 to 2024, the average monthly expected return in the Korean stock market was only 0.09%—just one-sixth the level in the U.S.—while unexpected volatility was 10% higher. The duration of sustained returns was also shorter, about 2.3 months, compared to 3.1 months in the U.S.

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The tendency to prioritize real estate investment with gains from stocks further limited additional consumption. For households without property, it is estimated that 70% of capital gains from stocks were redirected to real estate. The report explained, "The flow of capital gains into real estate first is a result of the fact that, historically, volatility in Korea's real estate market has been only one-eighth that of stocks, while the returns have been twice as high, making the opportunity cost of consumption greater."

However, there are signs of change in asset effect conditions recently. With the rapid rise in stock prices driven by global demand for artificial intelligence (AI), household holdings of equities have sharply increased. The demographic base has also broadened to include younger and lower-to-middle income groups, and expected gains have grown substantially.

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In the past year, household capital gains from stocks reached 429 trillion won—22 times the historical average. Since the newly participating groups in the stock market, such as young people and lower- to middle-income households, tend to have a relatively greater asset effect, there is a possibility that the overall asset effect on the Korean economy could expand further.

On the other hand, the report pointed out that, if stock prices fall, the reverse asset effect tends to be even larger. Therefore, a significant stock market correction could actually reduce the asset effect. The report noted, "Recently, leveraged investments such as credit loans have increased, so simultaneous declines in asset prices and increased debt burdens could amplify downward pressure on the economy," adding, "As the connection between the stock market and the real sector strengthens, it is essential to be well-prepared for potential risks."

In the mid- to long-term, the report recommended fostering a stable investment environment so that the stock market can serve as a foundation for household asset building. The report emphasized, "It is necessary to stabilize real estate prices to prevent the concentration of stock capital gains in real estate and to enhance incentives for households to hold stocks over the long term."