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Poor and wealthy hand-to-mouth households in Belgium

Author

Listed:
  • Laurens Cherchye

    (University of Leuven (KU Leuven))

  • Thomas Demuynck

    (Université libre de Bruxelles. Avenue F. D. Roosevelt 50)

  • Bram Rock

    (Université Libre de Bruxelles and Department of Economics, University of Leuven (KU Leuven))

  • Mariia Kovaleva

    (Université libre de Bruxelles. Avenue F. D. Roosevelt 50)

  • Geoffrey Minne

    (National Bank of Belgium)

  • Maite De Sola Perea

    (National Bank of Belgium
    Universiteit Antwerpen)

  • Frederic Vermeulen

    (University of Leuven (KU Leuven))

Abstract

We identify the population shares of poor hand-to-mouth households, wealthy hand-to-mouth households and non hand-to-mouth households in Belgium. We apply the methodology proposed by Kaplan & Violante (2014) and Kaplan et al., (2014) to the Belgian component of the Household Finance and Consumption Survey. We find that the fraction of hand-to-mouth households in Belgium is substantial and predominantly consists of wealthy hand-to-mouth households. We also compare the observable characteristics and marginal propensities to consume (MPCs) of the three household types. Belgian wealthy hand-to-mouth households have characteristics that resemble those of the non hand-to-mouth households, while their MPCs are often more similar to those of the poor hand-to-mouth households. This pleads for giving a unique place to each type of household when evaluating the effects of fiscal policy.

Suggested Citation

  • Laurens Cherchye & Thomas Demuynck & Bram Rock & Mariia Kovaleva & Geoffrey Minne & Maite De Sola Perea & Frederic Vermeulen, 2024. "Poor and wealthy hand-to-mouth households in Belgium," Review of Economics of the Household, Springer, vol. 22(3), pages 909-934, September.
    • Handle: RePEc:kap:reveho:v:22:y:2024:i:3:d:10.1007_s11150-023-09689-z
    DOI: 10.1007/s11150-023-09689-z
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    More about this item

    Keywords

    savings; hand-to-mouth households; liquidity; marginal propensity to consume (MPC);
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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