Saving and Housing of Taiwanese Households: New Evidence from Quantile Regression Analysis

Abstract

The main purpose of this paper is to examine the relationship between housing and saving of the household with quantile regression. By employing household survey data of Taiwan, this study focuses on the saving behavior across different levels of annual savings. It is not surprise to see that saving propensity various across the whole range of savings level. The results show that marginal effects of permanent income on savings is increasing as savings increase. Since income and saving is positively correlated, it is explicit that higher incomes results in higher savings and obviously the estimates of OLS model can’t provide complete picture of saving behavior. For low savers (savings below the first quartile) permanent income plays no role in explaining saving propensity. Besides, owners and renters tend to save less than the household with borrowed or issued housing while their saving propensity are convex across saving levels.