Household Savings behavior in Rural and Urban Areas in Punjab, Pakistan

Muhammad Yasir Nadeem, Ayza Shoukat, Muhammad Abdullah

Abstract
The study analyzes the behavior of household saving in Punjab province by using Há»usehá»ld Integrated Economic Survey (HIES) conducted in 2015-16 by the Pakistan Bauru of Statistic (PBS). A sample of 4372 há»usehá»ld selected for Punjab in which 2970 from urban and 1402 from rural Punjab. The study estimated three models separately for Punjab, Urban Punjab, and Rural Punjab. The ordinary least square (OLS) technique used to determine the relationship between variables. The result shows a positive relationship between há»usehá»ld saving and há»usehá»ld income and age. The Há»usehá»ld consumption negative related to saving and results are statistically significant at 5 percent level. The gender of há»usehá»ld revealed a positive relationship with saving in urban Punjab and negative in Punjab rural but it is not statistically significant. The overall result of the study revealed that há»usehá»ld income, and age of head is main determinant of saving behavior in Punjab. Saving trend in rural area is more as compared to urban area in Punjab province. The study suggests that government should reduce fiscal deficits in the period of economic growth and increase saving for investment. The govt. should encourage the saving scheme in banks and micro finance institutions and reduce non development expenditure for productive purpose because the rate of growth depends on the level of national saving and the productivity of capital investment.

Key words: saving, Income, age, maternal status, Consumption, gender, urban, rural, Punjab, Pakistan.

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