Applying quantile regression to determine the effects of household characteristics on household saving rates in Vietnam

Abstract

Purpose The purpose of this paper is to analyse the determinants of the saving behaviour of Vietnamese households and to explore the possible heterogeneity of household saving propensities. Design/methodology/approach The authors estimate the effects of household characteristics on Vietnamese household saving rates by means of a quantile regression approach using the Vietnam Household Living Standard Survey 2010 data set. Findings The results suggest that the way household characteristics influence saving rates is different for each quantile of the household saving rate distribution. Household characteristics tend to have stronger effects at lower quantiles. Particularly, the marginal propensity to save of households at low quantiles is higher than those at high quantiles. Analysing rural and urban households separately, the authors find evidence that household and household head characteristics have stronger significant effects for rural than for urban households. Children and elderly members should be treated as part of the household labour force, instead of household dependency, since both of them increase household saving rates. Originality/value This research contributes to the literature on Vietnamese household saving behaviours, especially for households living in urban areas.

The Internet Miracle: The Impact of Internet Access on Household Saving in Indonesia

“…Examining the different effects of urban-rural areas in China, Lugauer et al (2019) found that households in urban areas have a higher saving rate than similar households residing in rural areas. However, Hua and Erreygers (2019) documented a different finding-rural households in Vietnam tended to save more than urban households.…”

“…In the context of ethnicity, Hua and Erreygers (2019) found that ethnicity is a crucial factor in determining the household saving rate in rural areas. Fisher and Hsu (2012) discovered that marital status is associated with a higher likelihood of saving among white households, but not among Hispanic households.…”

“…1 Regarding the improvement in the affordability of financial services due to the expansion of internet access, whether this expansion will ultimately impact households' behavior, in terms of household saving allocation, remains unanswered in the existing literature. Frequently, the existing studies discuss household savings in relation to income (Harris, 2002;Finlay and Price, 2015), uncertainty (Kazarosian, 1997;Choi et al, 2017), inflation (Jongwanich, 2010;Cohn and Kolluri, 2003;Grigoli et al, 2018), interest rates (Athukorala and Tsai, 2003;Grigoli et al, 2018), demographics (Horioka and Watanabe, 1997;Braun et al, 2009;Hua and Erreygers, 2019;Lugauer et al, 2019), financial circumstances (Beckmann and Mare, 2017;Steinert et al, 2018), and institutions (Giavazzi and McMahon, 2012;Bebczuk et al, 2015). Until now, there are rare empirical studies comprehensively discussing the effects of internet access on household saving behavior.…”

Effects of Different Socio-economic Characteristics of Rural Households on Their Saving Decision in Pabna District of Bangladesh: A Binary Logistic Regression Analysis

“…By using structural equation modelling (SEM) for the adult population of UK, Furnham, A & Cheng, H [11], concluded that adult savings and investment have significantly strong and direct association with parental social status, educational qualifications and occupational prestige, trait conscientiousness, personal financial assessment and gender. Hua, TX & Erreygers, G [12] carried out a study in order to investigate the heterogeneity of household saving propensities in Vietnam by applying quantile regression approach. The results of the study revealed that the effects of household characteristics on saving rates vary across the quantiles in such a fashion that the influences of these characteristics on propensity to save are weaker at higher quantiles compared to lower ones.…”

Who is saving and how much? New evidence from Brazil

“…From the individual perspective, savings are essential because they generate financial safety during retirement, unexpected financial expenditures and helping in difficult situations such as disease and job losses (Iregui-Boh orquez et al, 2018). Therefore, understanding household saving behaviour, specifically its determinants, has focussed on a lot of empirical research (Hua and Erreygers, 2019).…”