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Household Wealth and Saving in New Zealand: Evidence from the Longitudinal Survey of Family, Income and Employment

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Author Info

  • Trinh Le

    ()
    (Melbourne Institute of Applied Economic and Social Research)

  • John Gibson

    ()
    (University of Waikato)

  • Steven Stillman

    ()
    (Motu Economic and Public Policy Research and University of Waikato)

Abstract

This paper uses data from the Survey of Family, Income and Employment (SoFIE) to estimate household saving in New Zealand between 2004-2006. Comprehensive data on wealth is collected biannually in SoFIE and we calculate household saving by examining how wealth has changed over time. We find that even the most conservative estimate of household saving was at least 14% of gross income during this time period. On the other hand, the indirectly derived Household Income and Outlay Accounts (HIOA) indicate (net) household saving was -12.5% per year over the same period. We also find no evidence that capital gains in housing during this time period crowded out saving or that the composition of household wealth in New Zealand differed from that in other developed countries.

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Bibliographic Info

Paper provided by Motu Economic and Public Policy Research in its series Working Papers with number 10_06.

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Length: 30 pages
Date of creation: Aug 2010
Date of revision:
Handle: RePEc:mtu:wpaper:10_06

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Keywords: Saving; Wealth; New Zealand; SoFIE;

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References

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  1. Trinh Le, 2007. "Does New Zealand have a household saving crisis?," Macroeconomics Working Papers 23081, East Asian Bureau of Economic Research.
  2. Ravallion, Martin, 2001. "Measuring aggregate welfare in developing countries - How well do national accounts and surveys agree?," Policy Research Working Paper Series 2665, The World Bank.
  3. John Gibson & Grant Scobie, 2001. "A cohort analysis of household income, consumption and saving," New Zealand Economic Papers, Taylor & Francis Journals, vol. 35(2), pages 196-216.
  4. Angus Deaton, 2004. "Measuring poverty in a growing world (or measuring growth in a poor world)," Working Papers 178, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  5. Katherine Henderson & Grant M. Scobie, 2009. "Household Debt in New Zealand," Treasury Working Paper Series 09/03, New Zealand Treasury.
  6. Trinh Le & Grant Scobie & John Gibson, 2009. "Are Kiwis saving enough for retirement? Evidence from SOFIE," New Zealand Economic Papers, Taylor & Francis Journals, vol. 43(1), pages 3-19.
  7. Leslie Hull, 2003. "Financial deregulation and household indebtedness," Reserve Bank of New Zealand Discussion Paper Series DP2003/01, Reserve Bank of New Zealand.
  8. Karen E. Dynan & Jonathan Skinner & Stephen P. Zeldes, 2000. "Do the rich save more?," Finance and Economics Discussion Series 2000-52, Board of Governors of the Federal Reserve System (U.S.).
  9. Angus Deaton, 2005. "ERRATUM: Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 395-395, May.
  10. Clive Thorp & Bun Ung, 2000. "Trends in household assets and liabilities since 1978," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 63, June.
  11. Grant M. Scobie & Katherine Henderson, 2009. "Saving Rates of New Zealanders: A Net Wealth Approach," Treasury Working Paper Series 09/04, New Zealand Treasury.
  12. Iris Claus & Grant Scobie, 2002. "Saving in New Zealand: Measurement and Trends," Treasury Working Paper Series 02/02, New Zealand Treasury.
  13. Emmanuel De Veirman & Ashley Dunstan, 2008. "How do Housing Wealth, Financial Wealth and Consumption Interact? Evidence from New Zealand," Reserve Bank of New Zealand Discussion Paper Series DP2008/05, Reserve Bank of New Zealand.
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