Household Saving Behaviour and Credit Constraints in the Euro Area

We study the role of household saving behaviour, of individual motives for saving and that of perceived liquidity constraints on household finances in 15 Euro Area countries. The empirical analysis is based on the Household Finance and Consumption Survey, a new harmonized data set collecting detailed information on wealth holdings, consumption and income at the household level. We find evidence of some degree of homogeneity across countries with respect to saving preferences and the relative importance of different motives for saving. In addition, we find a more heterogeneous impact of credit constraints on household finances, that are perceived to be binding for specific groups of respondents and geographic regions. Household characteristics and institutional macroeconomic variables are significant and economically important determinants of household saving preferences and credit constraints