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

Author

Listed:
  • 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.

Suggested Citation

  • Trinh Le & John Gibson & Steven Stillman, 2010. "Household Wealth and Saving in New Zealand: Evidence from the Longitudinal Survey of Family, Income and Employment," Working Papers 10_06, Motu Economic and Public Policy Research.
    • Handle: RePEc:mtu:wpaper:10_06
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    File URL: https://motu-www.motu.org.nz/wpapers/10_06.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
    3. 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.
    4. Grant M. Scobie & Katherine Henderson, 2009. "Saving Rates of New Zealanders: A Net Wealth Approach," Treasury Working Paper Series 09/04, New Zealand Treasury.
    5. Martin Ravallion, 2003. "Measuring Aggregate Welfare in Developing Countries: How Well Do National Accounts and Surveys Agree?," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 645-652, August.
    6. Karen E. Dynan & Jonathan Skinner & Stephen P. Zeldes, 2004. "Do the Rich Save More?," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 397-444, April.
    7. Iris Claus & Grant Scobie, 2002. "Saving in New Zealand: Measurement and Trends," Treasury Working Paper Series 02/02, New Zealand Treasury.
    8. Le, Trinh, 2007. "Does New Zealand have a household saving crisis?," NZIER Working Paper 2007/1, New Zealand Institute of Economic Research.
    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. Katherine Henderson & Grant M. Scobie, 2009. "Household Debt in New Zealand," Treasury Working Paper Series 09/03, New Zealand Treasury.
    11. Leslie Hull, 2003. "Financial deregulation and household indebtedness," Reserve Bank of New Zealand Discussion Paper Series DP2003/01, Reserve Bank of New Zealand.
    12. 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.
    13. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Rob Hodgson & Jacques Poot, 2011. "New Zealand Research on the Economic Impacts of Immigration 2005-2010: Synthesis and Research Agenda," RF Berlin - CReAM Discussion Paper Series 1104, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    2. Quyen Nguyen & Paul Thorsnes & Ivan Diaz‐Rainey & Antoni Moore & Simon Cox & Leon Stirk‐Wang, 2022. "Price recovery after the flood: risk to residential property values from climate change‐related flooding," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(3), pages 532-560, July.
    3. David Law & Grant M. Scobie, 2018. "KiwiSaver and the accumulation of net wealth," New Zealand Economic Papers, Taylor & Francis Journals, vol. 52(1), pages 1-20, January.
    4. Ramiz Rahmanov, 2015. "Banking Sector Development and Household Saving in Emerging Eastern Europe," William Davidson Institute Working Papers Series wp1089, William Davidson Institute at the University of Michigan.
    5. Paul Conway & Lisa Meehan & Dean Parham, 2015. "Who benefits from productivity growth? The labour income share in New Zealand," Working Papers 2015/01, New Zealand Productivity Commission.

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    More about this item

    Keywords

    Saving; Wealth; New Zealand; SoFIE;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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