Are Car Purchases Savings? An Analysis of German Households

  • Ulrich C. H. Blum
  • Marc J. I. Gaudry

Abstract

Savings, defined as increase in net wealth, are characterized in most studies as a portfolio of different financial assets or long term durable goods such as houses. Cars are normally not included, although they have typical properties of assets; for instance, they yield returns, change in value or are subject to risk just like bonds or shares. Germans, in particular, clearly take into account the resale values of cars when they make a car purchase, a ‘stylized fact’ that points to the usefulness of an analytical inquiry of this question: we want to explicitly test the hypothesis that car purchase expenditures are considered by households as part of their long-term investments, using German household data for 1983. Naturally, a savings function based on this extended definition should not look very different from a “classical” savings function.

Keywords

Income Resid Autocorrelation 

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Literature

  1. Blum, Ulrich C.H., 1985: The Influence of the German Social Pension Insurance System on Private Savings and on Spatial Income Distribution, Geld, Banken und Versicherungen, H. Göppl and R. Henn ed., Verlag Versicherungswirtschaft, Karlsruhe.Google Scholar
  2. Blum, Ulrich C.H.; Marc J.L Gaudry, 1990: The Impact of Social Security Contributions on Savings, Jahrbuch für Sozialwissenschaft, forthcoming.Google Scholar
  3. Gaudry, Marc J.I.; Marcel Dagenais, 1975: Heteroscedasticity and the Use of Box-Cox Transformations, Economics Letters 2/3, pp. 225 –229.CrossRefGoogle Scholar
  4. Gaudry, Marc J.L; Ulrich C.H. Blum, 1987: An Example of Correlation among Residuals in Directly Ordered Data, Economics Letters 26, pp. 335–340.CrossRefGoogle Scholar
  5. Statistisches Bundesamt (Federal Statistical Office), 1986: Einkommens- und Verbrauchsstichprobe 1983 (Sample of Income and Expenditures 1983), No. 4, Stuttgart — Mainz.Google Scholar

Copyright information

© Springer-Verlag Berlin · Heidelberg 1990

Authors and Affiliations

  • Ulrich C. H. Blum
  • Marc J. I. Gaudry

There are no affiliations available

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