Household portfolio behaviour: evidence from Middle East economies

Abstract

This article studies household portfolio behaviour for a group of Middle East economies, namely Israel, Jordan and Turkey. Panel unit root and cointegration tests are used to investigate the convergence of household portfolio behaviour; and asset demand equations are estimated in a novel way of comparing the three countries using the Seemingly Unrelated Regression (SUR) model. We identify some common household portfolio behaviour for currency (cash), time deposits, company securities and bank loans, among the economies. However, household portfolio preferences do not respond to exchange rate changes in a uniform way across the three countries.

Keywords:

• flow of funds
• household sector
• portfolio management
• panel data

JEL Classification:

• G11
• D13
• C51