Self-reliance, savings potential and indebtedness in the central part of the Great Plain

Abstract

Based on the relevant literature and on empirical research results, our working hypothesis was that financial savings and money management abilities show measurable differences in line with the demographic, economic and social situation of society.

We have taken into account that figures can vary in the light of the self-sufficiency potential of a household. Are the ones living in one household able to produce at least part of their own needs? We have examined these questions during the fall of 2011 in twenty townships of the central part of the Hungarian Great Plain by analysing the financial-economic situation of people living in this area. Those polled in the study represent the population of this region based on township, gender and age. Data shows that the highest capacity and willingness for financial savings can be found among the highly educated, intellectual people working in leading positions with high incomes, living in the cities.

From a methodological aspect, single young people are overrepresented, but married couples are the most probable to set aside money compared to those who are separated, divorced, widowed and those living with a domestic partner.

Married couples are also more likely to save for old age. However, savings for old age (to supplement the state pensions which are insufficient in many cases) are more typical among the population of small towns and villages.

The multivariate analysis of the saving and credit repayment ability revealed that the general monthly net income of a household correlates negatively with the consumption from subsistence farming: As the monthly net household income increases, the proportion of consumption from subsistence farming declines.

The proportion of consumption from subsistence farming of the members of a household does not correlate with the age of those polled. However, age and the amount of monthly net household income do correlate: With age, the monthly net household income decreases. Those polled can be best separated by applying the canonical discriminant method. Even if in debt, those in better financial circumstances have higher chances to save money compared to those living in more modest financial circumstances, irrespective of whether they are indebted or not.

It was also found that debt repayment ability is influenced by the degree of self-reliance: In cases where people are unable to pay back their debts, subsistence farming increases.