The Feasibility of Estimating the Demand

for Residential Mortgage Credit in Poland

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It is difficult to compare in monetary terms the costs and benefits of these steps.

Suffice it to say, however, that it should not be exceptionally expensive to begin a process

that will serve macroeconomic and microeconomic estimation for decades to come as

Poland's housing and housing finance sectors continue toward an equilibrium properly

characteristic of emergence from transition.

With regard to the most important and most challenging recommendation the

development and implementation of a household survey there will certainly be

development costs and data collection costs.  However, Poland by no means needs to

start from scratch.  First, as has been discussed, some of the necessary topics for a more

effective micro/household survey are already being addressed in various surveys in

Poland; they need, however, to be integrated at a household level  and redesigned in

order to support the types of estimations that Poland needs.  Second, a review of the AHS

and SCF will hopefully provide guidance as to design of an appropriate survey.  These

surveys have been utilized for many decades, and they have been thoroughly tested and

improved.  Without a newly devised household survey, however, Poland will lack basic

estimation capability since existing data cannot support it.  With regard to the remaining

recommendations, the necessary tasks for implementation are much less formidable.  In

summary, then, UIC suggests that the benefits will certainly outweigh the costs.

Additional details with regard to the key recommendations include the following.

#

Institute a Household Survey for Housing and Consumer Finance.

The first

and most important recommendation is that Poland needs to go back to the basics of

systematic household data collection for the analysis of many aspects of housing and

housing finance

.  This will entail, in the first ins

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tance, redesigning and/or combining some

of the various micro/household surveys that already exist.  It should not be too formidable

a task, as has been noted.

The household survey would concentrate on housing, housing finance, consumer

credit, other financial variables, savings, consumer durables, and so forth.  A single survey

could be modeled from the most relevant information in the AHS and SCF.  The emphasis

of the AHS is on housing consumption, housing features, housing finance, mobility, and

tenure choice.  The SCF has more detailed financial data, and thus provides better

information for analyzing for demand for mortgage credit in a portfolio choice context (that

is, how might households make decisions about allocating their wealth and entering into

different types of borrowing arrangements), and more information on wealth and asset

types.

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It has been noted by the World Bank (Bertrand Renaud) that China has recently designed a basic

household survey for housing, which will be implemented using a sample of 4,000 households. The reason is

exactly as for Poland: China wishes to better understand the basic economic relationships while developing its

housing reform plans.