The protective role of saving: Bayesian analysis of British panel data

We explore whether a protective role for savings against future financial hardship exists using household level panel data nationally representative sample of UK households. jointly model the incidence and extent problems, dynamic two-part approach allowing different data-generating processes experiencing experienced. Our results show that: (i) saving on regular basis mitigates likelihood experiencing, as well number of, problems; (ii) state dependence in problems exists; (iii) interdependence between housing costs, with higher costs associated an increased probability hardship.