Emergency Funds in Australian Households: An Empirical Analysis of Capacity and Sources

This paper examines demographic and socioeconomic characteristics as predictors of emergency fund adequacy in Australian households. The results indicate that the presence of children, the number of dependents and income-earning units, the age and ethnicity of the household head, income dependency upon retirement plans and investments and government pensions and benefits, homeownership and disposable income are significant determinants of the capacity to raise emergency funds. They are also important predictors of the likely source of emergency funds. However, they are generally better at predicting mainstay sources of funds such as own savings and loans from deposit-taking institutions and credit card usage than loans from family or friends.

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