Abstract
This paper uses National Balance Sheet data and defines households’ savings as the change in net worth estimated at book and at market value. The study examines the evolution of households’ savings and financing of assets in Canada over the past forty years, and takes into account a set of portfolio management variables that were largely ignored in prior studies. The findings, based on a quantile regression analysis, reveal that disposable income can be a significant determinant of net worth buildup only when balance sheets are estimated at book value and only for the fourth quartile savings level, whereas portfolio variables appear as significant determinants whether balance sheets are at book or at market values. These findings have public policy implications that are laid out and discussed.
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