How Do We Value Our Income from Which We Save?

University of Warsaw, Faculty of Economic Sciences Working Paper No. 3

Posted: 25 Apr 2011

See all articles by Barbara Liberda

Barbara Liberda

University of Warsaw - Faculty of Economic Sciences, Poland

Marek Peczkowski

University of Warsaw - Faculty of Economic Sciences

Ewa Gucwa-Leśny

University of Warsaw - Faculty of Economic Sciences

Date Written: April 25, 2011

Abstract

In this paper we measure the probability of a household to fall into one of the groups of households categorized by the subjective perception of income from which households save at different rates. The multinomial logit regression function is used to analyze the degree of satisfaction from disposable income. The variable specified for the valuation of income is income perception, defined as a class of income subjectively perceived as fulfilling the household needs in relation to the current disposable income of the household. Sufficient income is the reference category in the analysis. Factors that determine the perception of income are: gender and education of the household head, family characteristics, source of income, place of residence, and quintile group of disposable income. The predicted values of income perception, obtained from the multinomial logit regression, are related to the saving rates of households. The analysis shows that the saving rates of households are positively correlated not only with the observed values of income perceived as hardly sufficient, sufficient or good, but also with the predicted values of income perception. The research is based on the Household Budget Surveys data for Poland in 2008. The sample size is 37,316 households.

Keywords: household, income, needs, valuation, saving, probability

JEL Classification: D31, D14, D19

Suggested Citation

Liberda, Barbara and Peczkowski, Marek and Gucwa-Leśny, Ewa, How Do We Value Our Income from Which We Save? (April 25, 2011). University of Warsaw, Faculty of Economic Sciences Working Paper No. 3, Available at SSRN: https://ssrn.com/abstract=1822005 or http://dx.doi.org/10.2139/ssrn.1822005

Barbara Liberda (Contact Author)

University of Warsaw - Faculty of Economic Sciences, Poland ( email )

Dluga Street 44/50
Warsaw, 00-241
Poland
+4822 5549174 (Phone)
+4822 8312846 (Fax)

HOME PAGE: http://www.wne.uw.edu.pl/displayuser.php?login=liberda

Marek Peczkowski

University of Warsaw - Faculty of Economic Sciences ( email )

Hoza 69
Warszawa, Pl-00681
Poland

Ewa Gucwa-Leśny

University of Warsaw - Faculty of Economic Sciences ( email )

Dluga Street 44/50
Warsaw, 00-241
Poland

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