Microeconometric analysis of household saving in Estonia: income, wealth, financial exposure
Dmitry Kulikov and
Karsten Staehr ()
No wp2007-8, Bank of Estonia Working Papers from Bank of Estonia
This paper ascertains the determinants of household saving in Estonia based on a microeconometric analysis of household budget surveys from 2002 to 2005. Higher income leads to more saving, but the effect is largest for unanticipated income shocks. Ownership of real estate does not affect saving, while possession of durable goods like cars is associated with lower savings. A number of variables reflecting the households' financial exposure are of importance. Deposits, other forms of financial assets and access to liquidity reduce household saving. Surprisingly, debt and leasing liabilities and existing debt servicing payments also lead to lower savings. Young and in particular older households have a higher propensity to save than middle-aged households, while higher education is associated with lower savings. The results are robust to changes in the specification of the saving measure and the choice of estimation method.
Keywords: household saving; saving hypotheses; financial exposure (search for similar items in EconPapers)
JEL-codes: D12 D14 D22 (search for similar items in EconPapers)
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