Determinants of household saving behaviour in Ghana

Abstract

Developing countries generally exhibit low ‘saving’ (flow concept) and ‘savings’ (stock concept) rates. The factors underlying household positive or negative saving behaviours in developed and developing countries are not new in the macroeconomic literature. Whereas some determinants are theoretically generic, others are country- or community-specific and worth investigating. In this study, the determinants of household saving behaviour are examined. We obtain the results using primary data from a household survey and a logit econometric model with its associated average marginal effects. Our evidence shows that household income, level of education completed, employment status, and households with launching children (or transitioning older adults) are primary drivers of household saving behaviour in Ghana. Further heterogeneous analysis shows that saving behaviour does not statistically differ by gender but by poverty headcount. In line with the findings of this study, relevant policy prescriptions are discussed.

Keywords

• Saving
• behaviour
• demographic
• household survey
• primary data
• regression