The papers are based on  research supported by
    National Bank of Hungary, Ministry of Economic Affaires &
    "East-European Transition and EU Enlargement" Phare - Ace Programme (P98-2876-W)

Abstract
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In our paper we summarize the recent researches on Hungarian household savings based both on macro indicators and survey data and give a brief description of the evolution of Hungarian aggregate indicators for financial wealth, assets and liabilities. We analyze data obtained from a special survey conducted in September 2000. The survey questions were supplied by the authors and were constructed to gain insight into prevailing liquidity constraints, consumer impatience, households’ attitude towards indebtedness, and to separate „financially relevant” households, i.e. households with financial assets and/or liabilities, because these are the groups that are most relevant for economic policymakers. The paper also contains estimations of the propensity to borrow. Based on the survey questions, special indicators, such as income tension, consumer impatience are constructed and used – among others – as explanatory variables in the regressions.

The indebtedness of Hungarian households as a ratio to disposable income and GDP was declining until the end of the 1990s, and the current 7% debt/disposable income ratio is very low compared to the 50-150% ratio typical of developed countries. Based on the favorable prospects of the Hungarian economy, households have positive future income expectations, which – along with the easing of liquidity constraints and consumer impatience – projects the gradual rise of household indebtedness.

The analysis of a hypothetical windfall gain of 1 million forint (approx. 3760 euros) indicates that responding households would spend 35% of it on home buying, improving or upgrading purposes, and 42% would be used for saving, debt repayment and investment into business. This suggests that Hungarian households are rather unsatisfied with their living conditions and improving them has top priority. Besides that the share of households intending to save or invest the unexpected gain is also rather high.

We state that the liquidity constraint is an important element of the propensity to borrow of Hungarian households. Our results suggest that Hungarian households are moving from an equilibrium characterized by low indebtedness to one that corresponds more to what we find in developed countries, that is to an equilibrium with higher financial liability ratios. Based on similar recent economic history of transition countries, this conclusion is likely to be true for other EU accession countries as well.

JEL Classification: D12, P36

Keywords: transition, consumer behavior, household survey

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Download papers:

               [ English (short) version in WINWORD format (155 kbyte) ] (15/06/2001)
               The paper is presented on the conference "East European Transition and EU Enlargement: A Quantitative Approach"
                University of  Gdansk, 15-21 June, 2001 Gdansk - Sopot.

               [ English version in ZIP (WINWORD) format (130 kbyte) ]
                The paper is published in the "NBH Working Paper - National Bank of Hungary", 2001/2, April

               [ Hungarian (short) version in PDF format (179 kbyte) ] (29/11/2001)
               The paper is forthcoming in Közgazdasági Szemle, December, 2001.

               [ Hungarian full version in ZIP (WINWORD) format (371 kbyte) ] (02/05/2001)
               The paper is published in the "MNB Füzetek - Magyar Nemzeti Bank", 2001/2, April

Download database and questionnaire:

[  SPSS version in ZIP (POR) format 409 (1101) kbyte ]
[  STATA version in ZIP (DTA) format 282 (818) kbyte ]
[ Questionnaire (in Hungarian) WINWORD format 159 kbyte ]

 [ SPSS command file in SPS format (42 kbyte) ]

Some detailed results in ASCII format [ isc001.log, isc002.log, isc003.log, isc004.log ]

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