Cultural and Financial Dollarization of Households in Uruguay

Gerardo Licandro and Miguel Mello Costa ()

No 2017009, Documentos de trabajo from Banco Central del Uruguay

Abstract: In this paper, we analyze factors associated with the financial and cultural dollarization of households in Uruguay. We estimate cultural dollarization with data from the 2013 financial survey of Uruguayan households, particularly using the currency reporting option available to respondents. Financial dollarization, meanwhile, is estimated as the share of US dollar-denominated bank assets in total assets. We find that the level of dollarization of bank savings is mainly explained by the size of savings and household wealth. We also observe that our proxy variable for cultural dollarization is associated with wealth and home ownership. Other factors that influence cultural dollarization are age and years of formal education, which are positively and significantly correlated with the use of the US dollar as a unit of account and asset valuation. Larger households, on the other hand, are less culturally dollarized. The evidence points to the key role played by the pricing system in the dollarization culture.

Keywords: dollarization; financial decisions; households; indebtedness; saving (search for similar items in EconPapers)
JEL-codes: D1 D4 E (search for similar items in EconPapers)
Pages: 38 pages
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Chapter: Cultural and Financial Dollarization of Households in Uruguay (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:bku:doctra:2017009

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