This paper studies for the first time the distribution of income and wealth in Malta based on three waves of micro-level data from the Household Finance and Consumption Survey (HFCS). The focus of the analysis is to examine various socioeconomic aspects of income and wealth inequality and contributing factors, as well as determinants of the joint distribution of income and wealth. Results suggest that household main residence (HMR) is the most equalising factor of wealth inequality, while self-employment wealth is the most disequalising factor. The financing structure of HMR is particularly important to explain the position of a household in the wealth distribution. Furthermore, the age and education level of the reference person of a household, increases in household income and inheritance or gifts affect positively the probability of a household to be in a higher net wealth quintile.

This paper attempts to examine for the first time the effects of household wealth on consumption in Malta, based on household level data from the 2017 Household Finance and Consumption Survey (HFCS). The estimation of the log-log consumption function is performed using OLS regression, after taking into account the survey design. The results provide evidence in support of the existence of a wealth effect on consumption, stemming from housing and financial wealth. In particular, the housing wealth effect on consumption is positive and higher than the financial wealth effect for the whole sample size, especially for homeowners. In addition, comparisons in the differences in wealth effects across age groups confirm the existence of a life-cycle pattern in consumption.

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