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Rural Farm Household Saving Habit in Ethiopia: Evidence from South West Amhara Growth Corridor

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  • Fentahun Addis
  • Belainew Belete
  • Melaku Bogale

Abstract

This study explores farm household saving habit. Data used was drowning from 420 farm households in Amhara national regional state of Ethiopia. Order probit model was used to explore the determinants of farm household saving habit. Model result show that education, land size, saving account, community based health insurance, number of formal financial institution nearby increae likelihood of the household’s good saving habit formation while aid, festive expenditure and credit access were likely reduce households’ good saving habit. We suggest intervention to reduce funereal spending, expanding community based health insurance and incresing financial inclusion are required to build and scale up good saving habit formation of rural farm households.

Suggested Citation

  • Fentahun Addis & Belainew Belete & Melaku Bogale, 2019. "Rural Farm Household Saving Habit in Ethiopia: Evidence from South West Amhara Growth Corridor," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(3), pages 112-119, September.
    • Handle: RePEc:khe:scajes:v:5:y:2019:i:3:p:112-119
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    References listed on IDEAS

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    1. Athukorala, Prema-chandra & Sen, Kunal, 2004. "The Determinants of Private Saving in India," World Development, Elsevier, vol. 32(3), pages 491-503, March.
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    3. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
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    5. Schmidt-Hebbel, Klaus & Webb, Steven B & Corsetti, Giancarlo, 1992. "Household Saving in Developing Countries: First Cross-Country Evidence," The World Bank Economic Review, World Bank, vol. 6(3), pages 529-547, September.
    6. Wang, Hong & Zhang, Licheng & Hsiao, William, 2006. "Ill health and its potential influence on household consumptions in rural China," Health Policy, Elsevier, vol. 78(2-3), pages 167-177, October.
    7. World Bank, 2013. "Second Ethiopia Economic Update : Laying the Foundation for Achieving Middle Income Status," World Bank Publications - Reports 16740, The World Bank Group.
    8. Mark N. Harris & Joanne Loundes & Elizabeth Webster, 2002. "Determinants of Household Saving in Australia," The Economic Record, The Economic Society of Australia, vol. 78(241), pages 207-223, June.
    9. Timerga, Genanew & Gotu, Butte & Alem, Yegnanew, 2011. "Statistical analysis of saving habits of employees: a case study at Debre Birhan Town in North Shoa, Ethiopia," MPRA Paper 42301, University Library of Munich, Germany.
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    Cited by:

    1. Mohd Abass Bhat & Geleta Demera Gomero & Shagufta Tariq Khan, 2024. "Antecedents of Savings Behaviour Among Rural Households: A Holistic Approach," FIIB Business Review, , vol. 13(1), pages 56-71, January.
    2. Elias, Hailu & Beshir, Mohammed & Mehare, Abule, 2022. "Household Saving Behavior in Rural Ethiopia: Challenges and Policy Options," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 31(02), October.

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    More about this item

    Keywords

    Saving habit; farm household; order probit; Ethiopia;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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