A note on determinants of household saving behavior

Abstract

By using cross-sectional interview data form 429 randomly selected households, four different saving estimates, namely reported bank savings, repayments of debts, total savings and a liquidity estimate, are computed and analyzed separately. Both socioeconomic characteristics and "softer" variables, such as attitudes and expectations, are used as explanatory variables. In a regression analysis the predictors used, fail to explain bank savings, while the traditional socioeconomic variables are found to influence the debt measure. The behavioral predictors are more successful in explaining the liquidity measure. When the regression result with the liquidity measure as the dependant variable (with the highest R2 value) is decomposed using a hypothetical causal model and path analysis, it appears that the effects of household income and educational level of the family head are substantial. However, the intervening behavioral variables are still significant. © 1981.