Abstract
Saving is one of the most important variables in the macro-economic theory. Different studies revealed that there is a significant relationship between income, saving, and investment, though they can determine the economic level of nations. This study was designed to capture the constituents of saving under different categories in Southern nations, nationalities, and peoples region with special reference to South west Ethiopia, Kaffa Zone. Three different models were adopted from a number of econometric and regression models adopted by different scholars depending on the country’s and regional economic and socio-cultural behavior. The panel approach (panel data) and cross-sectional data was adopted to measure the determinants of saving. The data utilized for this study was collected from both primary and secondary sources. The average monthly net deposit (AMND) was ‘the dependent variable and the independent variables can be taken in two forms. The first category includes the macro-economic variables as (per capita income, employment, rate of inflation, interest rate …etc) and the second category addresses the demographic variables as (age, gender, education, occupation…etc) which can be entertained at micro level. The reason behind using both panel approach and cross- sectional data is to make the study focus more on individual level variables those are not addressed by most of the studies conducted at macro-level. In addition to this cross-sectional data can support the panel data and helps for comparison of individual level variables with the variables at macro- level. According to the results obtained from the analysis income of the individuals is the most significant variable with cv (). Gender and age are another significant variables affecting saving behavior of individuals with cv (). Consumption pattern and preferences of the individuals are the most significant variable determining the level of saving with significant level of 0.672.
Determinants of saving in selected Woredas of Kaffa Zone
