• An earlier version of this paper was presented at the meetings of the International Association for Research in Income and Wealth held in Lahnstein, Germany in August of 1989. The views expressed in this paper are those of the authors alone and in no way reflect the opinions of the Federal Reserve Board or the Federal Reserve System. The authors are grateful to Vito Natrella and Lars Osberg for comments on this paper.


In this paper the authors present evidence on household saving in the U.S. based on the panel data from the 1983 and 1986 waves of the Survey of Consumer Finances. Saving is measured in these surveys as the change in wealth over the three-year period. Using a variety of models, we are able to explain only about 7 percent of the variation in the level of saving. Demographic factors appear to be modestly useful in explaining saving. However, one fact is very clear from the patterns of correlation extracted so far: either the measurement error in the data is quite large, or idiosyncratic factors are very important in explaining saving behavior, or both.