that liquid wealth seems to be more relevant in dealing with a ...nancial shock in this part of the world.

# 2.2. Wealthy HtM individuals: Does this kind also exist in emerging markets?

We now explore the relevance of wealthy HtM arguments outside the developed world. Unfortunately, we do not have rich portfolio data. However, we can identify whether HtM individuals have a real estate property loan or not. While not ideal, this is very relevant information because, as discussed in great detail in Kaplan et al. (2014), housing wealth is an important source of wealth behind wealthy HtM and because between 50 and 70 percent of owner-occupied homes have a mortgage in developed countries.<sup>40</sup> For example, Kaplan et al. (2014) ...nd that HtM households due to “only house wealth”is about 6 percent of all households in the United States and 2 percent in Germany.

Panels A and B in Figure A.2.2 split the share of HtM individuals reported in Figure 2, into those who have a standing property loan and those who do not. Making a stretch in the use of the words, we refer to the share of wealthy HtM (�W ) and poor HtM (�P ). Panel A shows that, like in the developed world, wealthy HtM individuals are also present in emerging markets. On average, the share of wealthy HtM is 4.1 and 3.6 in developed and emerging markets, respectively.<sup>41</sup> Interestingly, yet not surprising, Panel B in Figure A.2.2 shows that while wealthy HtM constitute a relevant share of the population in developed countries, it is less so in emerging markets where the HtM phenomenon is largely driven by poor HtM individuals. On average, the share of poor HtM is 17.1 and 39.1 in developed and emerging markets, respectively.

# 2.3. Main characteristics of HtM individuals

We now analyze whether the capacity to deal with a ...nancial shock varies across several plausible relevant economic and demographic individual and household characteristics available in Global Findex. Table A.2.1 shows the share of HtM individuals by household income quintile, education level, age, sex, and labor status, in particular depending on whether the individual is part of the workforce and his/her employment status. Table A.2.2 reports marginal e¤ects from probit regressions in which the dependent variable equals 1 if the individual is HtM and 0 if he/she is not HtM; both one-characteristic-at-a-time and all of them jointly. Both tables report these relevant data for all countries as well as for emerging and developed countries separately.

The ...ndings support that individuals with higher household income, greater educational attainment, male, and employed report a higher capacity to deal with a ...nancial shock, both in developed and emerging countries (with even similar R<sup>2</sup> values among these groups). The main discrepancy between developed and emerging countries is related to the relevance of age. While in emerging markets the older the individual, the lower their capacity to deal with a ...nancial shock, in developed countries, respondents aged 15 to 34 report themselves as being more ...nancially vulnerable. All in all, the relevance of this set of economic and demographic characteristics as well as their ability to predict HtM individuals is comparable to previous studies. These ...ndings are broadly consistent with those of other studies focusing on the developed world (e.g., Lusardi et al., 2011). Moreover, if

> 40 See, for example, https://...vethirtyeight.com/features/how-many-homeowners-have-paid-o¤-their-mortgages/ and https://www.statista.com/statistics/957803/homeowners-with-and-without-an-outstanding-mortgage-in-eu-28per-country/#:~:text=An%20average%2026.5%20percent%20of,like%20the%20Netherlands%20and%20Sweden..

> 41 It is worth noting that our ...ndings based on a not ideal measure are quite similar to those relying on more sophisticated analysis for industrial countries like in Kaplan et al. (2014). For example, Panel A reports that in Figure A.3.2 the share of HtM individuals with property loan is 4.6 percent in the United States and 1.5 percent in Germany.

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