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Explaining the Saving Behavior of Households¡¯ in Ethiopia, Africa

Eric Asare, Eduardo Segarra (), Nakakeeto Gertrude and Fafanyo Asiseh

Applied Economics and Finance, 2018, vol. 5, issue 2, 143-151

Abstract: Savings have been shown to have a positive impact on economic growth at the macroeconomic level. But, the micro-level analysis of households¡¯ savings behavior is limited, especially in Sub-Saharan African economies. This study contributes to the understanding of the savings behavior of households in Africa, by modeling the savings behavior of households¡¯ in Ethiopia with the two-part model. The results of the study reveal that number of extension contacts and access to market information have significant positive effects on the likelihood that a household would save. Moreover, land holdings (bad production season last year) have significant positive (adverse) impact on the expected amount of money a household would save. Based on the results of this study, policies are recommended to increase savings in Ethiopia.

Keywords: households' savings; Africa; economic growth; Ethiopia; two-part model (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:rfa:aefjnl:v:5:y:2018:i:2:p:143-151