DETERMINANTS OF HOUSEHOLD SAVING IN SELECTED EUROPEAN COUNTRIES: ANALYSIS OF OBJECTIVE ECONOMIC FACTORS AND SUBJECTIVE EVALUATIONS

Household savings remain one of the key areas of economic research, particularly in view of the growing importance of subjective assessments of financial situations alongside traditional objective indicators. The aim of the study is to construct a simplified consumer confidence indicator and to evaluate its ability to explain differences in the household saving rate across EU countries. Eurostat data for the years 2000–2022 were used; principal component analysis (PCA) was applied to select the components, while the k-means method was used to classify countries. Out of the twelve components of the original Consumer Confidence Indicator (CCI), six variables most strongly associated with the first principal component were identified. The new indicator shows a high level of consistency with the original CCI (r = 0.70–0.93), and its relationship with the saving rate is moderately strong (r = 0.4–0.5). Combining objective and subjective measures of financial conditions allows for more accurate predictions of saving behavior than using either of these measures separately. The indicator may serve analytical institutions, central banks, and policymakers as a simple yet reliable alternative to the full CCI.