Do homeowners save more?: Evidence from the Panel o Household Finances (PHF)

In this paper we analyse the impact of property ownership on the saving behaviour of households. We are particularly interested in investigating whether homeowners save more than renters or not. A related question is whether mortgage payments and other regular savings are substitutes or complements for German households. To answer these questions we use a large cross-sectional dataset on individual households’ finances and employ a matching estimator. We find that households owning property and repaying mortgages do save more than renters, if contractual savings and mortgage payments are summed up. However, the difference between regular savings flows of renters and owners is small and insignificant. Owners do not seem to substitute contractual savings with mortgage payments