ABSTRACT
In this chapter we turn our attention to the household sector of the Polish economy. The basic format of the chapter is the same as that of the commercial banking chapter. We first look at the major changes which have taken place in the portfolio composition of the Polish households since the beginning of the reform period. This is followed by specification of a model which explains both consumption/saving and the portfolio selection decisions, and the implications of this integrated approach are brought out against the sequential approach. A detailed discussion of the data used to estimate the model is then undertaken, followed by the estimates of the model and their discussion. This chapter is then concluded with an examination of the tracking ability of the estimated model and some illustrative policy simulations.
