Irish households could be wealthier than previously reported, new research from the Central Bank suggests.
Figures published in the Irish Household Finance and Consumption Survey (HFCS), which estimates wealth, significantly under-records the total value of deposits held by Irish household by about two-thirds, a Central Bank comparison found.
The report used data collected by the Quarterly Financial Accounts, Central Bank Money and Banking Statistics, and other Central Bank data. The figures, which were gathered from the second quarter in 2013, captured about one-third of the aggregate figure for the period, the Central Bank paper estimated.
Researchers cross checked the HFCS figures with the Quarterly Financial Accounts, and adjusted the latter to remove figures relating to non-profit institutions serving households, non-incorporated enterprises, sole traders and partnerships that were irrelevant to the survey.
The HFCS surveyed almost 5,500 households on wealth, debt, income and consumption. It found the deposits reported in the adjusted quarterly accounts were nearly 3.5 times larger than in the HFCS, at €33.3 billion versus €112 billion. Loans reported in the quarterly financial accounts were also higher, at about 1.3 times what was in the HFCS.
The figures reported in the deposit level dataset, which contains records of 7 million deposit accounts with the largest banks here, found total household deposits were €58.9 billion in June 2014, with €59.4 billion reported in the Money and Banking Statistics.
The report could not identify a sole reason for under-reporting in the HFCS, noting that similar wealth surveys in other countries also suffered the same limitations. It suggested the measurement errors could be attributed to inaccurate replies from households, a lack of engagement by others with the survey and problems with the population sample used.
