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The main aim of the HFCS is to gather micro-level structural information on Euro area households’ assets and liabilities. The survey also collects additional information in order to analyse the economic decisions taken by households.

How will data be used?

Survey data are key to understanding individual behaviour and evaluating the impact of shocks, policies and institutional changes.

HFCS aims to collect key information to help policy-makers respond to the following questions:

Debt and financial pressures
  • What is the income and related distribution of debt (e.g. for different levels of income and net worth)?
  • Are there mismatches between the assets and liabilities of individual households in terms of their size, volatility, interest-rate sensitivity or liquidity?
  • Which types of debt are taken on by households (home equity withdrawal, credit card debt, interest rate modalities, etc.), and what, for instance, is the relationship between debt and collateral?
  • What drives households’ indebtedness?
  • How do macroeconomic and financial shocks affect indebtedness at the household level?
  • Can we run counterfactual simulations of the effects that adverse shocks have on individual households?
Portfolio choice and demand for assets
  • How unequally is wealth distributed?
  • Can we measure debt diversification? Can we measure home bias?
  • What determines demand for assets (e.g. stock market participation)?
  • What determines the share of riskier assets?
  • What determines home ownership/demand for housing? To what extent are houses/flats purchased for investment purposes (e.g. second homes)?
  • Do households that are subject to larger economic risks accumulate more assets?
  • What effect is the economic and financial crisis having on households’ balance sheets?
Saving, liquidity constraints and the smoothing of consumption
  • What is the extent (and cross-sectional distribution) of liquidity constraints?
  • What determines the extent of saving for retirement?
  • Do households have enough savings to maintain their consumption after retirement?
  • How well do different households mitigate adverse income and wealth shocks?
Computational finance
  • How well do standard models of consumption choices and labour supply in the presence of uncertainty match wealth distribution/inequality, the structure of balance sheets, home ownership, etc.?
  • Can we use structural models to estimate relevant "deep" parameters?
  • Can we use structural models to carry out counterfactual simulations of policy-relevant experiments?

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