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Microeconometric analysis of household saving in Estonia: income, wealth, financial exposure

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  • Dmitry Kulikov
  • Karsten Staehr

Abstract

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.

Suggested Citation

  • Dmitry Kulikov & Karsten Staehr, "undated". "Microeconometric analysis of household saving in Estonia: income, wealth, financial exposure," Bank of Estonia Working Papers wp2007-8, Bank of Estonia, revised 03 Feb 2015.
    • Handle: RePEc:eea:boewps:wp2007-8
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    File URL: http://www.eestipank.ee/sites/eestipank.ee/files/publication/en/WorkingPapers/2007/_wp_807.pdf
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    3. Boateng, Elliot & Amponsah, Mary, 2015. "Effect of interest rate on savings behaviour among Ghanaians: evidence from Kumasi, Ghana," MPRA Paper 63926, University Library of Munich, Germany, revised 20 Mar 2015.
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    5. Arda Aktas & Duygu Guner & Seyfettin Gursel & Gokce Uysal, 2010. "Structural Determinants of Household Savings in Turkey: 2003-2008," Working Papers 007, Bahcesehir University, Betam, revised Jun 2010.
    6. P.V. Viswanath, 2021. "Connectivity and Savings Propensity among Odisha Tribals," Sustainability, MDPI, vol. 13(2), pages 1-15, January.
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    8. World Bank, 2011. "Turkey - Country Economic Memorandum (CEM) : Sustaining High Growth - The Role of Domestic savings : Synthesis Report," World Bank Publications - Reports 12264, The World Bank Group.
    9. Egert Juuse & Rainer Kattel, 2014. "Financialisation and the Financial and Economic Crises: The Case of Estonia," FESSUD studies fstudy20, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.

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    More about this item

    Keywords

    household saving; saving hypotheses; financial exposure;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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