Do the Rich Save More in Canada?

Sule Alan, Kadir Atalay and Thomas Crossley ()

Koç University-TUSIAD Economic Research Forum Working Papers from Koc University-TUSIAD Economic Research Forum

Abstract: This paper is an attempt to answer the long standing question of whether more affluent households save a larger fraction of their income. The major difficulty in empirically assessing the relationship between incomes and saving rates is to construct a credible proxy for long-run income – purged of transitory fluctuations and measurement error. The Canadian Family Expenditure Survey provides us with both unusually good data on savings rates and potential predictors with which we can construct reliable long-run income proxies. Our empirical analysis suggests that the estimated relationship between saving rates and long-run incomes is sensitive to the predictor used to proxy long-run income. Nevertheless, our preferred estimates indicate that, except for poorest households (who simply do not save), saving rates do not differ substantially across predicted long-run income groups.

Keywords: Health inputs; saving rates; income; permanent income. (search for similar items in EconPapers)
JEL-codes: C81 D12 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2013-05
New Economics Papers: this item is included in nep-hme
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Do the Rich Save More in Canada? (2006)
Working Paper: Do the Rich Save More in Canada? (2006)
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