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Household Savings in Russia during the Transition


  • Mark C. Foley
  • William Pyle



We exploit panel data from the second phase of the Russian Longitudinal Monitoring Survey (RLMS) to investigate the household characteristics that explain saving during a period of extreme dislocation. Among our more noteworthy findings, we find evidence of short-term consumption smoothing behavior as households respond to temporary income shocks. Conditional on income level, we find that savings rates are higher in households benefiting from non-standard (likely transitory) sources of support such as private transfers and sales of home produced food; savings rates are lower, moreover, in households suffering from unemployment or payment arrears. We also confirm the robustness of an atypical U-shaped age-savings relationship to multivariate specifications. And finally, we turn up strong support for an inverse relationship between the household’s stock of durables and its saving rate.

Suggested Citation

  • Mark C. Foley & William Pyle, 2005. "Household Savings in Russia during the Transition," Middlebury College Working Paper Series 0522, Middlebury College, Department of Economics.
  • Handle: RePEc:mdl:mdlpap:0522

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    References listed on IDEAS

    1. Thaler, Richard H, 1990. "Saving, Fungibility, and Mental Accounts," Journal of Economic Perspectives, American Economic Association, vol. 4(1), pages 193-205, Winter.
    2. Kim, Byung Yeon, 1997. "Soviet Household Saving Function," Economic Change and Restructuring, Springer, vol. 30(2-3), pages 181-203.
    3. Kuhn, Randall & Stillman, Steven, 2004. "Understanding Interhousehold Transfers in a Transition Economy: Evidence from Russia," Economic Development and Cultural Change, University of Chicago Press, vol. 53(1), pages 131-156, October.
    4. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1797-1855, December.
    5. Paul R. Gregory & Manouchehr Mokhtari & Wolfram Schrettl, 1999. "Do The Russians Really Save That Much? - Alternate Estimates From The Russian Longitudinal Monitoring Survey," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 694-703, November.
    6. Denizer, Cevdet & Wolf, Holger & Ying, Yvonne, 2002. "Household Savings in the Transition," Journal of Comparative Economics, Elsevier, vol. 30(3), pages 463-475, September.
    7. Steven Stillman, 2001. "The Response of Consumption in Russian Households to Economic Shocks," William Davidson Institute Working Papers Series 412, William Davidson Institute at the University of Michigan.
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    Cited by:

    1. repec:dau:papers:123456789/12164 is not listed on IDEAS
    2. Notten, Geranda & Neubourg, Chris de, 2007. "Managing risks: what Russian households do to smooth consumption?," MPRA Paper 4670, University Library of Munich, Germany.
    3. 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.

    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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