# Appendix 2. Basic facts of HtM and non-HtM individuals

On top of questions FIN24, FIN37, and FIN38 (already discussed in the main text, sub-section 4.1), in this Appendix, we also used the following questions from Global Findex Data to help characterize basic relevant facts of HtM and non-HtM individuals:

- Question FIN25 (which is included in the ...nancial resilience section) asks the surveyed individual in case of responding positive to FIN24 “What would be the main source of money that you would use to come up with [1/20 of GNI per capita in local currency] within the next month?”The possible answers being one of the following: “savings”, “family, relatives, or friends”or “money from working”, “borrowing from a bank, employer, or private lender”, “selling assets”, or “some other source”. We use this question to show that while savings is the most important (yet hardly the single) mechanism to cope with a ...nancial shock in the developed world, it is more limited in emerging markets where “family, relatives, or friends” seem to be more relevant. We also show that selling assets is not very relevant either in developed or emerging markets supporting that illiquid wealth does not seem to be very relevant in dealing with a ...nancial shock.

- Question FIN19 (which is included in the borrowing section) asks the surveyed individual “[d]o you, by yourself or together with someone else, currently have a loan you took out from a bank or another type of formal ...nancial institution to purchase a home, apartment, or land?”, respectively. The possible answers being “yes” or “no”. We use this question to provide an insight regarding the so-called wealthy HtM individuals identi...ed in previous studies for developed countries. In particular, we distinguish HtM individuals into those having a property loan (as a proxy of a particular type of relevant wealthy HtM individual) and those not having a property loan (as a proxy of the so-called poor HtM).

- Individual characteristic variables regarding income, educational attainment, age, sex, and labor status, in particular depending on whether the individual is part of the workforce and his/her employment status.

## 2.1. How relevant are individual savings to deal with a ...nancial shock?

Figure A.2.1 shows the main source of funds non-HtM individuals report would use to deal with a ...nancial shock. In line with the literature available for developed countries which relies on liquid wealth (as opposed to total wealth which also includes illiquid assets, e.g. houses), individuals from this set of countries would mainly rely on savings (see blue bars in Panel A) and very little on selling assets (see blue bars in Panel E). In fact, the main reliance of non-HtM individuals on savings as a source to cope with a ...nancial shock in developed economies is of 59.3 percent, distantly followed by funds originating from family, relatives, or friends (with an average of 16 percent) and money from working (with an average of 12.9 percent). On the other hand, selling assets as a main source of funding is supported only by 1.4 percent of non-HtM individuals.

Notably, while still important, savings are much less relevant in emerging markets. In fact, the funds originating from family, relatives, or friends are, on average, 36.6 percent (i.e., more than twice of that depicted in developed countries), followed by savings and money from work (representing 28.3 and 24.2 percent, respectively). It is also worth noting that, in emerging markets, the share of non-HtM individuals asserting to the selling of assets to deal with a ...nancial shock is also very low and virtually identical to that observed in the developed economies. On average, only 1.5 percent of non-HtM individuals in emerging markets would rely on selling assets which, in turn, also support