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Household Savings in Hong Kong: A Statistical Analysis

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Abstract

Based on the primary data derived from a household savings survey conducted by the authors and supplementary secondary data extracted from government official statistics, the results of statistical analysis show that the disparities in the distribution of household savings in Hong Kong was more serious than that in household income or expenditure, the major household saving motive was precautionary, the key determinant of household savings was salaries income, the life-cycle hypothesis of savings could be applied in Hong Kong, and savings were not adequate for the vast majority of households in Hong Kong.

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Notes

  1. Saving rate refers the percentage of disposable income that is saved rather than spent.

  2. Available at: http://data.worldbank.org/indicator/NY.GNS.ICTR.ZS.

  3. Available at: http://eng.stat.gov.tw/ct.asp?xItem=35330&ctNode=3570&mp=5.

  4. In 2011, there were 30.4 % households living in public rental housing and 15.9 % in subsidized home ownership housing. Extracted from “Domestic Households by Type of Housing, Hong Kong Population Census 2011 Summary Results, p. 75”. Available at: http://www.censtatd.gov.hk/hkstat/sub/sp170.jsp?productCode=B1120055.

  5. There were 668,621 domestic households with 1 or more older persons, constituting 28.2 % of the total domestic households in the whole territory. The average household size of these domestic households was 2.8, which was about the same as that for all domestic households in Hong Kong. Extracted from “Thematic Report: Older Persons, Hong Kong 2011 Population Census, Paragraph 2.1”. Available at: http://www.census2011.gov.hk/pdf/older-persons.pdf.

  6. Since the denominator of any fraction cannot have the value zero, the survey enumerators were told to remind the interviewees that their household income should include bank deposit interest earnings, social welfare department’s Comprehensive Social Security Assistance (CSSA) and Old Age Allowance (Fruit money), or alimony.

  7. The calculating formula is: \({\bar{\text{X}}} = \frac{{\sum\limits_{{{\text{j}} = 1}}^{ 4} {{\text{f}}_{\text{j}} {\text{X}}_{\text{j}} } }}{\text{n}} = \frac{ 1}{\text{n}}\left( {{\text{f}}_{ 1} {\text{X}}_{ 1} + {\text{f}}_{ 2} {\text{X}}_{ 2} + {\text{f}}_{ 3} {\text{X}}_{ 3} + {\text{f}}_{ 4} {\text{X}}_{ 4} } \right)\) where: \({\bar{\text{X}}}\) is the household mean age; n is the household size; f1, f2, f3, and f4 are the number of household members in the age group under 18, 18 and under 25, 25 and under 65, and 65 and over, respectively; X1 = (18 − 0) ÷ 2 = 9, X2 = 18 + (25 − 18) ÷ 2 = 21.5, X3 = 25 + (65 − 25) ÷ 2 = 45, X4 = 76.56 (where 76.56 is the mean age of people aged 65 and above, calculated from the Mid 2011 population by age group and sex (p. 8), Hong Kong Population Projection 2012–2020, Hong Kong Census and Statistics Department.)

  8. The CV is obtained by expressing the standard error as a percentage of the estimated mean to which it refers.

  9. Marginal propensity to save (MPS) is a component of Keynesian macroeconomic theory and is calculated as the change in savings divided by the change in income.

  10. Each of the 10 decile groups contains the same number of domestic households (ranked by household income, expenditure, or household savings respectively). The 1st decile group includes households falling below the 10th percentile, the 2nd decile group includes those falling between the 10th and 20th percentile, and so on.

  11. The average annual rate of change in real GDP per capita and real private consumption expenditure in 2008–2013 was 2 and 3.9 %, respectively. The figures are calculated from official statistics provided by Hong Kong Census and Statistics Department available at: http://www.censtatd.gov.hk/hkstat/sub/sp250.jsp.

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Acknowledgments

The authors gratefully acknowledge the financial support from the Research and Staff Development Committee of Hong Kong Shue Yan University. We appreciate the constructive comments from the editor and reviewers at JFEI as well as comments from participants of the 10th Biennial Conference of Asian Consumer and Family Economics Association in Taipei.

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  1. Department of Economics and Finance, Hong Kong Shue Yan University, 10 Wai Tsui Crescent, Braemar Hill Road, North Point, Hong Kong

    Che-cheong Poon & Tai-Yuen Hon

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Appendix

Appendix

See Table 12.

Table 12 The coefficient of variation (CV) of the estimates of the main variables in the survey questionnaire
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Poon, Cc., Hon, TY. Household Savings in Hong Kong: A Statistical Analysis. J Fam Econ Iss 36, 353–368 (2015). https://doi.org/10.1007/s10834-015-9457-0

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