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Evangelos Charalambakis

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Presentation on theme: "Evangelos Charalambakis"— Presentation transcript:

1 Evangelos Charalambakis
How Did the Greek Financial Crisis Impact on Households? A Comparison of the Two Waves of the HFCS Evangelos Charalambakis Economic Analysis and Research Department, Bank of Greece SEM 2017, 4thAnnual Conference, MIT Samberg Center 26-28 July 2017

2 Questionnaire of HFCS 2

3 Basic Sample Characteristics
1st Wave 2009 2nd Wave 2014 Fieldwork Period 06/ /2009 06/ /2014 Sampling design Stratification based on NUTS II region and urbanization Stratification based on NUTS II region and urbanization Oversampling Strategy Regional real estate prices Regional average income and regional real estate prices Type of Data Cross-sectional Gross Sample 6,354 7,368 Net Sample 2,971 3,003 Response Rate (%) 47.2 40.8 Refusal Rate (%) 46.4 50.6 Missing Values Estimation Multiple Imputation with five implicates 3

4 Household Structure 1st Wave 2009 2nd Wave 2014 Household Size % 1
1st Wave 2009 2nd Wave 2014 Household Size % 1 20.1 25.7 2 28.3 29.5 3 24.2 19.9 4 23.3 19.1 5+ 4.1 5.9 Housing Status Owners Outright 58.5 60.7 Owners with Mortgage 13.9 11.4 Renters-Other 27.6 27.9 4

5 Household Structure… 1st Wave 2009 2nd Wave 2014
1st Wave 2009 2nd Wave 2014 Age of Reference Person % 16-34 15.2 12.5 35-44 20.7 18.0 45-54 17.7 19.9 55-64 18.6 65-74 15.5 16.1 75+ 12.4 15.4 Education of Reference Person  % Basic education 45.7 39.3 Secondary education 33.4 42.4 Tertiary 20.8 18.3 Work Status of Reference Person Employee 39.7 36.5 Self-employed 18.9 14.4 Retired 34.7 Other not working 6.6 9.8 5

6 The Distribution of Net Wealth
1st Wave 2009 2nd Wave 2014 Percentiles Net Wealth (in euros) Net Wealth (in euros) Percentage Change (%) t-stat difference in percentiles P10 2,011 588 -70.8 -2,2** P20 15,947 6,967 -56.3 -3,1*** P30 51,763 29,369 -43.3 -5,1*** P40 78,474 49,238 -37.3 -7,0*** P50 108,649 65,030 -40.1 -7,9*** P60 138,356 85,266 -38.4 -6,9*** P70 177,281 110,384 -37.8 -6,8*** P80 234,985 151,513 -35.5 -6,7*** P90 353,573 238,900 -32.4 -4,3*** 6

7 Median Net Wealth by Income Percentiles and Housing Status
1st Wave 2009 2nd Wave 2014 Income Percentiles Median (in euros) P1-P20 54,740 32,532 P20-P40 78,620 50,663 P40-P60 111,879 62,480 P60-P80 130,080 85,045 P80-P90 177,136 106,980 P90-P100 255,583 137,519 Housing Status Owners Outright 151,784 93,251 Owners with Mortgage 127,764 64,263 Renters-Other 5,776 3,035 7

8 Participation in Asset Components
1st Wave 2009 2nd Wave 2014 Real Assets % t-stat difference in percentages Total real assets 92.2 91.9 -0.24 Household main residence (HMR) 72.4 72.1 -0.00 Other real estate property 37.9 35.7 -0.98 Vehicles 73.0 70.6 -1.34 Self-employment business wealth 9.8 15.7 4.23*** Financial Assets  % Total Financial Assets 74.5 74.6 0.04 Deposits 73.4 73.9 0.20 Shares publicly traded 2.7 0.8 -3.31*** 8

9 Median Value of Household Assets
1st Wave 2009 2nd Wave 2014 Value of Household Assets Median (in euros) Percentage Change (%) t-stat difference in medians Total assets 117,461 73,420 -37.5 -8.4*** Real assets 121,677 78,087 -35.8 -8.6*** Real estate assets 127,795 80,203 - 37.2 -6.9*** Household Main Residence (HMR) 106,340 69,834 -34.3 -12.7*** Other Real Estate Property 65,900 49,167 - 25.2 -2.3** Financial Assets 4,631 1,995 -56.9 -4.1*** Deposits 3,856 1,987 -48.5 -2.9*** 9

10 Participation in Debt Components
1st Wave 2009 2nd Wave 2014 Debt % t-stat difference in percentages Total debt 36.6 27.1 -4.69*** Mortgage debt 17.5 13.3 -2.89*** HMR mortgage 13.9 11.4 -1.82* Other property mortgage 3.9 2.1 -3.12*** Non-mortgage debt 26.1 17.4 -4.43*** 10

11 Median Value of Household Debt
1st Wave 2009 2nd Wave 2014 Household Debt Median (in euros) Percentage Change (%) t-stat difference in medians Total debt 15,425 12,097 -21.6 -1.3 Mortgage debt 43,410 35,261 -18.8 -1.4 HMR mortgage debt 41,902 34,619 -21.0 -1.2 Other property mortgage 44,311 34,222 -22.8 -1.0 Non-mortgage debt 4,591 2,936 -36.0 -2.6*** 11

12 Debt Burden Indicators
1st Wave 2009 2nd Wave 2014 Debt burden indicators (%) Median t-stat difference in ratios Debt-income ratio 47.1 53.1 0.7 Debt-asset ratio 14.8 17.3 0.8 Loan-value ratio of household main residence 31.6 42.4 1.5 Debt service-income ratio 8.8 -4.9*** Mortgage debt service-income ratio 16.3 18.1 1.2 12

13 Participation in Income Components
1st Wave 2009 2nd Wave 2014 Income Components % t-stat difference in percentages Employee Income 54.0 46.9 -4.04*** Self-employment Income 27.8 20.5 -4.37*** Income from Pensions 44.2 46.7 1.41 13

14 The Distribution of Household Income
1st Wave 2009 2nd Wave 2014 Percentiles Household Income (in euros) Percentage Change (%) t-stat difference in percentiles P10 7,758 6,569 -15.3 -2.4** P20 11,729 9,924 -15.4 -6.7 *** P30 15,533 12,207 -21.4 -6.7*** P40 19,179 15,003 -21.8 -7.0*** P50 23,492 17,465 -25.7 -8.5*** P60 28,453 20,312 -28.6 -8.6*** P70 34,209 24,336 -28.9 -8.2*** P80 42,259 30,454 -27.9 -8.0*** P90 56,865 39,737 -30.1 -7.9*** 14

15 The Distribution of Employee Income
1st Wave 2009 2nd Wave 2014 Percentiles Household Income (in euros) Percentage Change (%) t-stat difference in percentiles P10 9,598 7,234 -24.6 -2.7*** P20 13,307 10,608 -20.3 -4.2 *** P30 16,263 12,855 -21.0 -5.2*** P40 19,141 15,196 -20.6 -24.9*** P50 23,210 17,357 -25.2 -8.5*** P60 26,218 19,653 -25.0 -6.5*** P70 31,121 23,163 -25.6 -5.7*** P80 38,913 28,713 -26.2 -6.7*** P90 53,235 37,677 -29.2 -7.8*** 15

16 The Distribution of Self-Employment Income
1st Wave 2009 2nd Wave 2014 Percentiles Household Income (in euros) Percentage Change (%) t-stat difference in percentiles P10 5,210 5,283 1.4 0.0 P20 8,436 8,242 -2.3 -0.2 P30 11,193 10,558 -5.7 -0.5 P40 14,966 12,954 -13.4 -1.8* P50 17,216 14,964 -13.1 -2.0** P60 21,220 17,705 -16.6 -2.0* P70 26,513 21,194 -20.0 -3.0** P80 32,628 25,940 -20.5 -1.7 P90 52,088 37,056 -28.9 -2.9** 16

17 The Distribution of Food Consumption
1st Wave 2009 2nd Wave 2014 Percentiles Food Consumption (in euros) Percentage Change (%) t-stat difference in percentiles P10 3,144 2,223 -29.3 -5.5*** P20 4,202 2,937 -30.1 -6.4*** P30 5,089 3,567 -29.9 -16.3*** P40 5,743 4,145 -27.8 -11.9*** P50 6,520 4,764 -26.9 -7.3*** P60 7,644 5,363 -29.8 -17.0*** P70 8,865 5,958 -32.8 -9.8*** P80 10,089 6,598 -34.6 -8.2*** P90 12,700 8,144 -35.9 -10.2*** 17

18 The Distribution of Food Consumption at Home
1st Wave 2009 2nd Wave 2014 Percentiles Food Consumption at Home (in euros) Percentage Change (%) t-stat difference in percentiles P10 2,503 1,731 -30.8 -3.5*** P20 3,142 2,369 -24.6 -2.6*** P30 3,759 2,394 -36.3 -15.0*** P40 3,827 2,983 -22.1 -4.8*** P50 5,050 3,565 -29.4 -13.8*** P60 5,109 3,596 -29.6 P70 6,205 4,647 -25.1 -7.9* P80 6,897 4,772 P90 8,804 5,963 -32.3 -8.8*** 18

19 The Distribution of Food Consumption Outside Home
1st Wave 2009 2nd Wave 2014 Percentiles Food Consumption outside Home (in euros) Percentage Change (%) t-stat difference in percentiles P10 249 110 55.8 -120.0*** P20 627 236 62.4 -89.2*** P30 1,249 589 52.8 -34.3*** P40 1,264 596 -207.1*** P50 1,278 953 25.4 -20.3*** P60 1,903 1,190 37.5 -173.1*** P70 2,510 1,419 43.5 -57.7*** P80 3,185 1,791 43.8 -40.1*** P90 4,841 2,379 103.5 -46.4*** 19

20 Percentage of Households stating that expenses are lower than income
1st Wave 2009 2nd Wave 2014 % T-stat difference in percentages All 21.9 13.5 -4.3*** Income Percentiles P1-P20 9.3 7.2 P20-P40 17.5 8.5 P40-P60 19.7 10.0 P60-P80 22.6 16.1 P80-P90 32.4 22.0 P90-P100 48.5 29.3 Housing Status  % Owner-outright 24.2 16.0 Owner with mortgage 19.0 Renter or Other 18.3 10.1 20

21 Conclusions Greek crisis negatively impacts on households’ net wealth, income and consumption. The median value of net wealth has dropped sharply by 40% during the crisis. The decrease in net wealth is statistically significant across all percentiles of the distribution. The decrease in net wealth is primarily attributed to the devaluation of the real assets and mainly to the HMR and secondarily to the drop in the value of deposits. While the value of total debt and mortgage debt has fallen during the crisis, there is no statistical significance. However, we document a statistical significant drop in the value of non-mortgage debt. 21

22 Conclusions… The median value of household income has fallen by 26% whereas the annual food consumption has decreased by 27%. The drop in both income and consumption is statistically significant across all the percentiles of the corresponding distributions Unlike the previous waves, in the 3rd Wave of the HFCS we will provide more information on Greek households’ liabilities including questions that refer to household debt derived from inland revenues, pension schemes, utilities and municipals. 22

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