Statistical analysis of saving habits of employees: a case study at Debre Birhan Town in North Shoa, Ethiopia

Saving represents one of the most predictable determinants of successful personal and economic development. People desire to save although they tend to postpone saving until they have higher-paying jobs or some stability in their lives. However, in developing countries, where opportunities for structured and institutionalized saving are rare, people could perhaps begin saving earlier than expected. The purpose of this study has been to assess saving habits and identify factors that influence the saving habits of employees at Deber Birhan town. A sample of 480 was collected from employees on saving habit at Debre Birhan town during February, 2010 to October, 2011. Saving habit was measured according to multi method tool that incorporates self report, visual analog scale and economic identification test. Descriptive, Binary logistic regression and Bayesian statistical methods were used. The result indicates that 47.29% employees had no saving experience and 52.71% of the respondents have been involved in saving part of their income. It was also found that government employees have lower saving habits than the private employees. The results obtained from the analysis of binary logistic regression indicate that age, education, number of dependent family members, transport service, job satisfaction in the sector, cost of expenditures and inflation significantly affect the saving habits of employees. Being a member of saving association, cost of recreation and housing are also significantly related with saving habits of employees. Results from binary logistic regression indicate that after controlling other variables in the model, the odds of saving decreases for instance by 43.4% for one unit increases in number of dependent family members. Employees who had job satisfaction in the sector were less likely to be in no saving habit with odds 2.491. The result from Bayesian analysis indicates that monthly salary, distance from home to work place and supporting others with money were significant predictors of saving habits. Furthermore, education, number of dependent family members, cost of expenditures and monthly salary are important factors affecting saving habits of employees.