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.
Highlights
The contribution of national saving in general, and household saving in particular, to economic growth of a country has been confirmed in various studies (Aron and Mihaescu, 2014; Deaton and Paxson, 2000)
As far as household size is concerned, we find that it has a significant negative effect on the household saving rate for both the OLS and the quantile regression approach
Looking at the results for urban and rural households separately, we find that the influence of the educational level of the household head on household saving rates is consistent in both cases
Summary
The contribution of national saving in general, and household saving in particular, to economic growth of a country has been confirmed in various studies (Aron and Mihaescu, 2014; Deaton and Paxson, 2000). As far as Vietnam is concerned, Minh et al (2013) studied household saving behaviour by distinguishing four types of saving and by estimating the level of consumption of households. Ha et al (2015) examined the short-term precautionary saving motives of Vietnamese households with positive saving levels, while Sepehri and Akram-Lodhi (2005) analysed the role of both domestic and foreign saving for Vietnam. Published in Journal of Asian Business and Economic Studies. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode
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