Discussion Paper: Results of the Household Finance and Consumption Survey in Latvia
This paper presents an overview of the main results of the Household Finance and Consumption Survey in Latvia, which was conducted in 2014 and collected responses from 2 814 individuals (1 202 households). Unique data on household wealth, including their assets and liabilities, as well as income and consumption were gathered. The data this survey collects are representative of the population, and the survey is to be carried out regularly to study aggregate and distributional changes in household budgets, wealth components and inequality over time.
The survey results show that households in Latvia, in comparison with those in the euro area, have much higher ownership rates of the most important household asset – the main residence (76% vs. 61% respectively). However, the median value of this asset and of total assets is markedly lower than in the euro area. On the liabilities side, only one third of Latvian households have outstanding debt – one of the lowest readings among euro area countries. Taking all components of a household balance sheet together, the median net wealth of households in Latvia is 14 200 euro, which is more than seven times smaller than that of euro area households. While the largest net wealth holdings in the euro area are owned by the households where the reference person is at a pre-retirement age, it is the young households (especially the group aged 35–44) in Latvia that own the largest amounts of net wealth and earn the highest median income.
Keywords: household finance and consumption survey, Latvia, assets, liabilities, net wealth, financial fragility, income, consumption
JEL codes: D14, D31, E21