Saving Behavior among Different Income Groups in Pakistan: A Micro Study

Abstract

National saving is composed of public and private savings. Private saving includes household savings as a major part. Household saving behavior differs among various income groups. The study explores the socio economic and demographic factors influencing household savings of various income groups. For that purpose, authors have selected Multan district as study area. They have gone for stratified random sampling technique and selected 88, 97 and 107 households from lower, middle and higher income group following per capita income method. It is concluded that education, children’s educational expenditure, family size, liabilities and value of house are reducing factors while total dependency rate and income are inducing factors for household savings of lower income groups. Savings of middle income group is positively related to total dependency rate and total income. On the other hand, it is inversely affected by children’s educational expenditures, liabilities, marital status, size of land holdings, and value of house. Higher income households are likely to save more due to age, spouse participation, total income and size of land holdings and likely to save less due to age square, children’s educational expenditures, liabilities to be paid by household head and marital status. It is also suggested that Govt. should give emphasis for the promotion of free health and educational facilities in rural regions especially.