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This paper reports new data on the household balance sheet and the consumption situation in Lithuania. It uses a unique Household Finance and Consumption Survey (HFCS) dataset, which collects detailed information about different asset classes and outlines the composition of the household balance sheet in Lithuania. At 93.2%, the homeownership rate in Lithuania is the highest in Europe. Real assets correspond to the highest share of households’ wealth and generate a median net wealth of 46 000 €. Lithuanian households participate poorly in financial assets, with only deposits and individual insurance/pensions generating more significant aggregate values. Household participation in debt markets is also limited in Lithuania, with only 11.7% of households having some mortgage-based liabilities. Lithuanian households spend a significant share of their income on food and utilities. This share is among the highest in Europe. A large number of Lithuanian households can be characterized as "hand-to-mouth" households, as they own a significant amount of wealth in illiquid real estate and very little wealth in liquid financial assets.

JEL Codes: D1, D3.

The views expressed are those of the author(s) and do not necessarily represent those of the Bank of Lithuania.

Despite Lithuania’s household income inequality being among the highest in the European Union (EU), little empirical work has been carried out to explain such disparities. In this article, we use the EU Statistics on Income and Living Conditions sample micro data. We confirm that income inequality in Lithuania is high compared to the EU average and find that it is robust to inequality measure or equivalence scale used. We have also decomposed household disposable income inequality by subgroups and factors. We find that the number of employed household members in Lithuania’s households affects income inequality more as compared to the EU. It is related to a larger labour income, and self-employment income in particular, contribution to inequality in Lithuania as opposed to the EU. Moreover, transfers and taxes have a smaller impact on reducing inequality in Lithuania than in the EU.

JEL Codes: D31.

The views expressed are those of the author(s) and do not necessarily represent those of the Bank of Lithuania.