Determinants of Household Saving in Gedeo Zone, Southern Ethiopia

Abstract

This study examines the factors contributing for low rate of saving: the case of Gedeo zone. The study employed both descriptive and econometric method of data analysis. It employed censored regression model, that is, the Tobit model to investigate the main determinants of household saving in Gedeo zone. Accordingly, it is found that income, education, gender (being female), availability of financial institutions such as Banks and Microfinance institutions positively and significantly affects household saving. However, people in the early age and saving are negatively and significantly related. The study also found that other determinants of household saving like location of the household head (Households reside in the rural area) and household size  negatively and significantly affects household saving. That is, households reside in the urban area save more than households reside in the rural area and as household size  increase household saving changes in the opposite direction.

Keywords: Age, education, female, Gedeo zone, gender, household, household saving, household size, income, model, rural, tobit, urban.