Explaining the Saving Behavior of Households’ in Ethiopia, Africa

Eric Asare, Eduardo Segarra, Nakakeeto Gertrude, Fafanyo Asiseh


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.

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DOI: https://doi.org/10.11114/aef.v5i2.2923


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Applied Economics and Finance    ISSN 2332-7294 (Print)   ISSN 2332-7308 (Online)

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