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Insurance in Czech households
Fialová, Kamila ; Mysíková, Martina
Insurance increases household welfare by transferring uncertainty from risk-averse individuals to risk-neutral institutions. Thus, the main motive for purchasing insurance is risk aversion to avoid loss. Insurance can improve the financial resilience and overall financial stability of households, with particular importance for low-income households.\nHousehold demand for insurance depends on many factors, including the socio-demographic characteristics of household members, the economic structure of the household, the evolution of the macroeconomic environment, as well as institutional factors. Specific household preferences, attitudes and risk perceptions are also important. However, of all the factors, household income is generally cited as the most important as it has a major impact on demand for both life and non-life insurance.\nAlmost 60% of respondents have life insurance, the vast majority of them also use some form of non-life insurance (54% of all respondents). On the other hand, almost a tenth have no insurance at all. At least one of the considered forms of non-life insurance is generally used by the majority of the total respondents (84.4%), while only 31% of respondents have non-life insurance (and not life insurance at the same time).\nPeople with higher education and households with children are more likely to use insurance, which may be related to the motivation to secure their dependents. Household income and financial reserves have a significant impact. Low-income households are significantly less likely to take out insurance, which may be due to the fact that insurance is unaffordable for them. In contrast, households with long-term financial reserves are more likely to use insurance. Life insurance is also used more often by people who have other loans or credits besides a mortgage.\n
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Long-term savings in Czech households.
Fialová, Kamila ; Mysíková, Martina
Long-term savings help to maintain a stable standard of living and well-being for people at different stages of their lives, or even to support a rising standard of living over time, even after the loss of income that can be expected, for example, in retirement. The main reasons for saving for the long term are to provide for retirement, invest in property or higher education, either for oneself or for one's children. The aim of this study is to identify the main factors that can influence long-term savings. \n\n
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Financial affordability of housing in Czech households
Fialová, Kamila ; Mysíková, Martina
Housing costs generally represent the most important item of household consumption expenditure. While the average European household spends 25% of its budget on housing, including energy and other payments, in 2021, the Czechs spend as much as 28%. Housing affordability is generally defined as the provision of a certain standard of housing at a price or rent that is considered a reasonable burden on households. If a household's share of housing costs is too high, this can have a negative impact on other household consumption as well as on living standards. The study assesses the burden of housing costs on Czech households using objective and subjective methods and identifies the main factors influencing the financial burden.
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Loans, credit and debt in Czech households
Fialová, Kamila ; Mysíková, Martina
The use of loans and credit is one of the pillars of households' financial resilience and stability. Household borrowing and lending is common in all developed countries and does not necessarily have negative consequences. Indebtedness has a double-edged relationship with household financial resilience. On the one hand, access to loans and credit can improve households' resilience to financial shocks and enable households to increase their welfare by making it easier to smooth consumption over the life course. But on the other hand, high levels of household debt reduce resilience to future financial shocks. Excessive debt can be a sign that a household may not be managing its financial situation and is therefore not financially resilient.\nIn terms of potential impacts, a distinction should be made between indebtedness and over-indebtedness. Over-indebtedness refers to a situation where households are struggling to repay their debts, which can cause financial stress and threaten households' living standards. This study uses two approaches to measure over-indebtedness: objective and subjective. It aims to identify the main factors influencing household over-indebtedness under both approaches.\n
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