Estimates of personal sector wealth for South Africa
Without information on the market values of the main components of household wealth, it is difficult to understand the behaviour of aggregate consumer spending and of the broad money holdings of households. This paper constructs the first coherent set of aggregate personal sector wealth estimates at market value for South Africa. Our estimates derive from data published by the Reserve Bank on financial flows and various other capital market data, much of it at book value. Our methods rely, where relevant, on accumulating flow of funds data using appropriate benchmarks, and, where necessary, converting book to market values using appropriate asset price indices. The paper plots asset to income ratios for various asset classes, and by relating these to asset price movements and rates of return, throws some light on changes in the composition of personal sector wealth. The most striking changes have been the rise in pension wealth - overtaking housing wealth in the early 1990s, the rise in debt, and the relative decline of liquid assets and housing wealth since the early and mid-1980s, respectively. Areas of current ignorance are highlighted, particularly those concerning foreign assets, the unincorporated business sector and the nature of pension rights.
|Date of creation:||01 May 1999|
|Date of revision:|
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- Tamim Bayoumi, 1992.
"Financial Deregulation and Household Saving,"
Bank of England working papers
5, Bank of England.
- B.W. Smit & B.A. Mocke, 1991. "Capital Flight from South Africa: Magnitude and Causes," South African Journal of Economics, Economic Society of South Africa, vol. 59(2), pages 60-77, 06.
- James M. Poterba, 1987.
"Tax Policy and Corporate Saving,"
470, Massachusetts Institute of Technology (MIT), Department of Economics.
- Berg, Lennart, 1994. "Household Savings and Debts: The Experience of the Nordic Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 10(2), pages 42-53, Summer.
- Jeremy I. Bulow, 1982. "What are Corporate Pension Liabilities?," The Quarterly Journal of Economics, Oxford University Press, vol. 97(3), pages 435-452.
- Schmidt-Hebbel, K. & Serven, L., 1997. "Saving Across the World: Puzzles and Policies," World Bank - Discussion Papers 354, World Bank.
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