A Study of the determinants of household saving in the european countries

Abstract

This work analyses the empirical determinants of household saving rates using data from 21 European countries for 2000-14. The purpose of this research is to review and extend the usual set of explanatory variables that are used to explain saving behaviour. Previous literature signals that the saving behaviour is determined by economic, demographic, social and cultural factors. This work examines these determinants and also the effects of the economic crisis in saving patterns. Moreover, it adds another possible determinant of household saving decisions: the weather. To carry out the analysis we used a panel data model. The results show that some economic, social and demographic variables have an impact in saving rates. In addition, the crisis is found to have a significant influence in saving patterns. It is also concluded that the weather is not a relevant variable in defining household saving rates. Nonetheless, the study of the variable weather has faced some limitations, that if overcome might bring other results in future studies