• Journal of Consumption Culture
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• v.15 no.1
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• pp.93-118
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• 2012

The purpose of this study was to examine the effect of a householder's working type on household saving from the perspective of precautionary saving behavior theory and the determinants of household saving by householder's working type. The data for this study was from the 2009 year of the Korea Welfare Panel Survey (KOWEPS), consisting of 2,463 households with householders whose working type was regular or non-regular employment(temporary, daily or public work). OLS regression analyses and Chow-tests were performed. In the regression analyses, the dependent variables for household saving were precautionary saving and precautionary asset. Precautionary saving was operationalized with the amount of average monthly saving and the ratio of average monthly saving to average monthly disposable income, and precautionary asset was operationalized with the amount of financial assets and the ratio of financial assets to net assets. The independent variables were household income, household assets, householder's working type(regular, non-regular), householder's age, sex, education level and marriage status, income level, the number of household members, housing type, debt, and public transfer income. Monthly average total consumption expenditures for household income, and net assets for household assets, the existence of spouse for marriage status, poverty for income level were used. Public transfer income was classified into three, social insurance, basic assistance and government assistance. For the analyses, Stata 11.0 version was used. The results are as follows: Householder's working type was significantly related to the precautionary saving behavior of a household. However, the precautionary saving and the precautionary asset of a household with a householder in non-regular working type was lower than those of a household with a householder in regular working type. This result is not consistent with the expectation from the perspective of precautionary saving behavior that the saving of a household with a householder in non-regular working type is expected to be higher than that of a household with a householder in regular working type. According to the analyses of the determinants for precautionary saving behavior by householder's working type, monthly average total consumption expenditures, debt, net assets, poverty, the number of household members, basic assistance were statistically significant variables. The positive relation of basic assistance to precautionary saving(the amount of average monthly saving and the ratio of average monthly saving)is a noteworthy result in the analyses of the determinants for household saving by householder's working type. The above results suggest the followings. First, it is easy to predict the unstability of economic life of a household with a householder in non-regular working type because of relatively low precautionary saving and precautionary asset. The reason for the low precautionary saving and the low precautionary asset may be a low current income of the household in spite of its willingness to save. If this reasoning is possible, it suggests that policies are needed for households with householders in non-regular working type to save. Second, the relatively low precautionary saving and precautionary asset of a household with a householder in non-regular working type suggest also their long-term economic stability. This suggests they need to try a long-term financial planning even though they have limitations to save for future because of their low current income. It is necessary to develop the financial planning for the households with unstable incomes. Third, the determinants for precautionary saving behavior by householder's working type were mostly the ones which reflect the economic condition of a household. This suggests that the economic condition of a household is a core factor for household saving. Consequently, it emphasizes the efforts for a household to acquire the adequate level of income for saving. Forth, the positive relation of basic assistance to precautionary saving(the amount of average monthly saving and the ratio of average monthly saving) suggests the possibility for a household to accumulate the precautionary saving and the precautionary asset in the channel of basic assistance.

• Proceedings of the Korea Inteligent Information System Society Conference
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• 2001.01a
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• pp.325-329
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• 2001

This paper tests existence of precautionary saving motive under health uncertainty, using household level panel data from Korea. For this purpose, this paper considers a dynamic health capital model with health uncertainty and derives testable equations for changes in consumption and medical expenditures. Under this framework, households who face future health uncertainty will exhibit precautionary behavior by depressing consumption or increasing investment in health. To test this hypothesis, the paper uses the conditional variance of health as the direct measure of health uncertainty, obtained by estimating a multinomial logit model. Empirical results using the Korean Household Panel Study (KHPS, 1993 - 1997) suggest that Korean elderly households follow the precautionary behavior to insure against future health risk.

• Economic Analysis
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• v.26 no.3
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• pp.48-70
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• 2020

Using data from the Household Income and Expenditure Survey over the period 1994-2016, we estimate the coefficient of relative prudence in order to capture precautionary saving motive. To do this, we adopt a cohort approach, where we transform such microdata into sample cohort means. Together with initial income involving liquidity constraint, we estimate the relative prudence derived from the Euler equation. The two-stage least-squares (2SLS) between estimate of it obtained from the cohort panel data analysis is too small for the existence of precautionary saving motive, as in previous studies, while the 2SLS random effects estimate is so reasonable. Moreover, the liquidity-constrained cohorts tend to be more sensitive to uncertainty, relative to the unconstrained ones.

• International Journal of Human Ecology
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• v.4 no.2
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• pp.55-75
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• 2003

The purpose of this study was to investigate the effect of employment related factors on household savings for precautionary purposes when controlling for financial security and to compare the results between the two different economic periods. A conceptual framework was developed based on the precautionary saving theory, the family stress theory, and previous empirical studies. As a self-insurance, a measure of security funds were developed and used as the dependent variable. Using data on working households in the 1992 and the 1998 Survey of Consumer Finances (SCF), a MLE estimation was conducted on the pooled data. The 1992 and 1998 data were used to reflect periods of economic recession and expansion, respectively. The results suggested that factors representing resources played the most significant role in determining the amount of security funds. Some of the employment related factors, preferences, financial security, and race were also significantly affected the amount of security funds. The results suggested that stable employment conditions were important for households to accumulate security funds. Households with more human resources and financial resources had a larger amount of security funds than those that had less human and financial resources. From the findings, implications for research, policies, and financial educators had been suggested.

• The Korean Society of Law and Medicine
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• v.9 no.2
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• pp.383-422
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• 2008

Considering above, It might be efficient that medical disputes would be settled by the intervention, the agreement, and the administrative relief that reflect mediators' opinion, who have rich social experience as well as specialized knowledge. Therefore, KCA needs to strengthen its function of mediation and improve relevant systems to become an effective settlement institution. And although Oriental medicine disputes have mainly given ex post facto explanations so far, administrative efforts such as policy development or legislation should be made for the high quality of Oriental medical services offered because an efficient way saving social or economic costs caused by the dispute would be precautionary measures. The traditional Oriental medicine is featured with the lack of baseline examination, the uncertainty of medical mistakes, the difficulty in clarifying and proving facts, the hardship of injury conformation and causality because of the characteristics of Oriental medicine, and the relative lightness of physical damages. Actually, there has been few legal settlements in Oriental medical disputes since the compensation, itself, compared to the lawsuit cost, is relatively much lower without practical benefits.

• KDI Journal of Economic Policy
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• v.33 no.4
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• pp.1-25
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• 2011

Available evidence suggests that the average marginal propensity to consume (MPC) from the 2001 tax rebate in the US was not nearly as large as that from previous tax cuts. We examine if this phenomenon can be explained by the fact that the widespread use of credit cards has made borrowing accessible for most US households by constructing a model that simulates the dynamic effect of relaxed borrowing constraints. Our model uses Kreps-Porteus preferences which account for independent measures of relative risk aversion and the elasticity of intertemporal substitution, both of which can theoretically affect the willingness to save or spend. Our model shows that the average MPC drops substantially immediately after borrowing constraints are relaxed because few consumers have binding borrowing constraints at that time. The model also shows that consumers gradually reduce their wealth after borrowing constraints are relaxed, causing more of them to have binding constraints over time, which in turn causes the average MPC to rise gradually to a new steady state value that is slightly lower than the original value. This dynamic pattern of the MPC suggests that a greater ability to borrow with credit cards could explain the lower effectiveness of the 2001 tax rebate. In addition, the model predicts that consumers choose to hold lower amounts of liquid assets for precautionary reasons when they have a greater ability to borrow unsecured debt.