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Working paper

Household net wealth: an international comparison (WP 01/19)

Issue date: 
Monday, 1 January 2001
Status: 
Current
View point: 
Publication category: 
JEL classification: 
E21 - Macroeconomics: Consumption; Saving; Wealth
N20 - Economic History: Financial Markets and Institutions: General, International, or Comparative

Formats and related files

This paper examines household saving in New Zealand and other OECD countries, with particular focus on the stock of net wealth.

Abstract

Household saving can be measured as either the difference between the flows of current income and expenditure, or through households’ balance sheets as changes in the stocks of accumulated net wealth. This paper examines household saving in New Zealand and other OECD countries, with particular focus on the stock of net wealth. The ratio of real assets to disposable income in New Zealand is close to OECD levels. However, household financial net wealth as a proportion of disposable income has been falling in New Zealand since the late 1980s, whereas it has been rising in other OECD countries. As a result, housing assets in New Zealand have become an increasing share of households' wealth portfolios. The implied savings rate from households’ balance sheets is significantly higher than the flow measure. Moreover, it follows the business cycle more closely, consistent with consumption smoothing behaviour by households.

Disclaimer

The views expressed in this Working Paper are those of the author(s) and do not necessarily reflect the views of the Treasury. The paper is presented not as policy, but with a view to inform and stimulate wider debate.

Last updated: 
Tuesday, 23 October 2007