Determinants of Household Savings in Pakistan: Evidence from Micro Data

Abstract

This study aims to analyze household saving behavior in Pakistan. The paper
employs micro data tapes of Pakistan Integrated Household Survey (PIHS)
2001-02 and Pakistan Social Living Standards Measurements Survey
(PSLM) 2011-12 conducted by Pakistan Bureau of Statistics (PBS). The
study utilizes Absolute Income Hypothesis for estimation purpose and draws
several conclusions. Saving increases with the level of income and declines
with increases in dependency ratio, family size and age. In addition, it is
found that saving rates have increased between 2002 and 2012 for all
categories of households. Male headed households save more than their
female counterparts. Saving rates of households with single and widowed
heads are higher than those of their married counterparts. Households living
in a joint family system have higher saving rates in comparison to nuclear
family set ups. Finally household savings are conversely highest for
households whose head has no formal education and decline successively
with each level of education.