Survey of Household Finances (EFF) 2008: Methods, results and changes since 2005

The Spanish Survey of Household Finances (“EFF” by its Spanish acronym) is a survey by the Banco de España which allows the linking of income, assets, debt and spending of each household unit. The third edition of the EFF (EFF2008), referring to the end of the first quarter of 2009, has been designed to give continuity to this statistical source, from which data were collected for the first time in 2002 and subsequently in 2005. The EFF2008 updates the information on household finances and thus allows an assessment of the changes in the financial position of Spanish households in the period from the end of 2005 to the end of the first quarter of 2009 (2009 Q1), while offering a more up-to-date picture of the structure of household assets and debts. The usefulness of the information contained in a survey such as the EFF has prompted the system of euro area central banks to decide to conduct a financial survey in all the euro area countries, following a methodology similar to that of the EFF. Thus the EFF2008 will allow a harmonised comparison with the new European surveys of the financial position of households. An important characteristic of the three editions of the EFF is that their samples contain a large number of high-wealth households. Since the distribution of wealth is heavily skewed and some types of asset are only held by a small fraction of the population, in the absence of very large samples, it is important to oversample the wealthiest households. This is what the EFF does, to ensure that its sample is representative not only of the population as a whole, but also of the aggregate wealth of the economy, in order to facilitate the study of financial behaviour at the top of the wealth distribution. Another important characteristic of the EFF is that, from the second edition onwards, some of the households that participated in previous editions have been re-interviewed, while a refreshment sample has been incorporated to preserve the representativeness of the overall sample. Thus, the EFF2002, EFF2005 and EFF2008 samples contain a common sub-set of households that can be observed at various points in time, considerably expanding the possibilities for analysing the nature of the changes observed. These characteristics (which are highly desirable for a survey of this kind) have been obtained by means of a system of blind collaboration with the National Statistics Institute (“INE” by its Spanish acronym) and the tax authorities (TA), which respects strict tax confidentiality requirements and response anonymity. However, first and foremost, we are most grateful for the generosity of the households that have participated in this project, especially those that have participated in various waves of the EFF. This article describes the results of the EFF2008 and the changes observed in the financial position of households between 2005 and 2009 Q1. It also contains a box summarising the main methodological characteristics of the EFF2008 (see Box 1), which are described in more detail in Bover (2011). The first section reviews some important aspects of the socio-economic background to the period from 2005 to 2009 Q1. The second section presents the results for household income and net wealth. The third section analyses households’ holdings of real and financial assets. The fourth section provides information on the debt and debt burden of households. The fifth section focuses on aspects relating to household spending. Finally, the sixth section contains some concluding remarks. The distributions of most of the important variables, such as those relating to the various assets and debts, have very high values for a relatively small number of households. Typical values of the distribution are therefore better approximated by the median than by the mean, so this is the statistic included in the tables. All the variables relating to income, wealth, debt and spending levels are expressed in real terms. More specifically, all euro amounts have been expressed in March 2009 euro using the consumer price index (CPI).