Analysis of the trends and determinants of credit and saving behavior of households in the Russian regions

Objective: to identify the current trends and factors of credit and savings behavior of the Russian households.Methods: graphical method, logit model, probit model, maximum likelihood method.Results: the development of digital services, the acceleration of inflation and the increase in debt burden resulting from the pandemic have changed the model of economic behavior of households. The need to analyze credit and savings behavior has become more acute in order to empirically substantiate the measures of economic, legal and financial support of households by state institutions. The analysis showed an increase in the average loan amount and the proportion of families whose members took a loan; a decrease in the proportion of families who borrowed from individuals, lent money and made savings; a sharp increase in the variation of the amount of credit and savings in 2019; a decrease in the number of commodity loans and an increase in the number of consumer and mortgage loans. A positive effect of the number of people in the household, place of residence, income, availability of a computer, laptop and high-speed Internet access in the household on the probability of attracting credit funds was found; a negative influence of the number of people in the household and place of residence (village) on the probability of savings was confirmed; the impact of having a computer and high-speed Internet access on the probability of savings in the household was not found.Scientific novelty: the article uses data from the Russian Monitoring of the economic situation and public health of the HSE University for the period from 2010 to 2019 to identify the current trends and factors of credit and savings behavior of the Russian households.Practical significance: the main conclusions of the article can be used in scientific and practical activities in the development of financial literacy programs, policies and online products to motivate and encourage credit and savings behavior and attract investment.

Less is not more: 401(k) plan information and retirement planning choices

This paper presents the results of a choice experiment that is designed to examine whether changing how plan information is presented affects planned retirement-savings behavior. The main hypothesis is that providing plan information in a more concise format with helpful recommendations, rather than providing lengthy and detailed information, will alter retirement-planning choices. The specific choices examined include: whether to enroll, how much to contribute, and how to structure (broadly) the asset allocation. The choice experiment is conducted on three different samples: (i) a Qualtrics panel of new employees, (ii) a Qualtrics panel of job seekers, and (iii) a sample of business-school students. Our results suggest that, controlling for demographic and other factors, our main hypothesis was not supported by the data in any of the samples. Thus, the data cast some doubt on the notion that simplifying and condensing the retirement-plan information presented to employees will result in vastly different retirement-planning choices.

Impacts of two-year multisectoral cash plus programs on young adolescent girls’ education, health and economic outcomes: Adolescent Girls Initiative-Kenya (AGI-K) randomized trial

Background Early adolescence is a critical window for intervention when it is possible to lay a foundation for a safe transition to adulthood, before negative outcomes occur. The Adolescent Girls Initiative–Kenya randomized trial tested the effects of combinations of interventions for young adolescent girls in two sites – the Kibera informal settlement in Nairobi and rural Wajir County in the Northeastern region. Methods The interventions included community dialogues on the role and value of girls (violence prevention), a conditional cash transfer (education), weekly group meetings for girls with health and life skills training (health), and training and incentives for financial literacy and savings activities (wealth creation). Participants were randomized to one of four study arms: 1) violence prevention only, 2) violence prevention and education, 3) violence prevention, education and health or 4) violence prevention, education, health and wealth creation. An intent-to-treat (ITT) analysis was conducted using longitudinal data to estimate the impact of each combination of interventions and various sensitivity analyses conducted addressing potential attrition bias and multiple hypothesis testing concerns. Results In Kibera, the education conditional cash transfer had small effects on grade attainment but larger impacts on completion of primary school and the transition to secondary school in the most comprehensive arm; the health intervention improved sexual and reproductive health knowledge and condom self-efficacy; and the wealth intervention improved financial literacy and savings behavior. In Wajir, the education conditional cash transfer increased school enrollment and grade attainment, and the wealth intervention improved savings behavior. Conclusions The results indicate that when trying to improve a range of outcomes related to adolescent wellbeing for young girls, a multisectoral intervention with components addressing household economic constraints is a promising approach. Trial registration Trial Registry: ISRCTN, ISRCTN77455458. Registered 24/12/2015 - Retrospectively registered.

Towards an Understanding of Low-Income Individuals’ Financial Resiliency: Exploration of Risk Preferences, Personality Traits, and Savings Behavior

The Coronavirus disease 2019 (COVID-19) pandemic has helped expose and exacerbate individuals’ and households’ financial vulnerability worldwide. Meanwhile, behavioral elements affecting low-income populations’ ability to save and become more financially resilient have yet to receive sufficient academic attention. This exploratory study aims at the beginning to help elucidate the determinants of low-income individuals’ real-life savings behavior by utilizing laboratory performance measures (to characterize participants’ risk preferences by using the Balloon Analog Risk Task – BART, in study 1), as well as self-report surveys (to characterize participants’ personality traits, in study 2). Combining results from both studies, latent personality traits (i.e., attitude towards risk, perseverance, distractibility, and state anxiety) are found to affect the risk preferences of low-income individuals (captured using a novel BART performance measure indicative of an individual’s strategic risk preference adaptation), which in turn impact their ability to successfully complete matched savings programs and, thus, their ability to save and enhance their financial resilience.

Effect of Financial Literacy on Individual Savings Behavior; the Mediation Role of Intention to Saving

This study investigated the effect of financial literacy on savings behavior, considering the mediation effect of intention to savings. A structured questionnaire was distributed among 206 employed individuals in the Colombo district, Sri Lanka. Three Stage Least Squares technique was initially used to analyze the structural equations model fitted to measure the hypothesized mediation effect. Then the result was rousted using path analysis. The findings indicated that financial literacy has a direct and positively significant influence on savings behavior. Moreover, the mediation effect of intention was also found as positively significant in the above relationship. This indicates that the knowledge of the financial system leads to good savings behavior, and especially it creates an intention to save more. Therefore, policymakers and financial institutions can consider enhancing financial literature among individuals as a worthy strategy when encouraging savings as it both encourages savings behavior and the intention to do so.

Incorporating Private Savings Behavior in Product Offerings: A Case Study of Pakistan

In order to enhance understanding about the actual savings behaviour and impulses which drive savings behaviour, it is interesting to study the micro foundations of savings behaviour. Collecting micro data through filled questionnaire from households in urban areas, this study identifies the motives of savings and the instruments and channels where the savings are invested in Pakistan. The results reveal that investment motive, higher income and greater frequency of household members joining labor force for earning incomes enhance the monthly savings rate. The results can be used to offer Islamic investment deposits in an attractive way. If the investment deposits are pitched properly by highlighting the stable ex-post investment returns and low ex-post volatility, then people with an investment motive parking their savings in fixed income mutual funds would be attracted towards Islamic investment deposits. Likewise, incremental long term savings plans wherein periodic investments increase over a period of time can be offered given that monthly savings rate are found to be positively associated with income. Finally, joint investment accounts can be offered given the finding that monthly savings rate is higher in households with greater number of earning members in family.JEL Classification: G11, G21, G23How to Cite:Shaikh, S. A. (2021). Incorporating Private Savings Behavior in Product Offerings: A Case Study of Pakistan. Signifikan: Jurnal Ilmu Ekonomi, 10(2), 247-258. https://doi.org/10.15408/sjie.v10i2.20139.

AN EMPIRICAL STUDY ON THE DETERMINANTS OF RESIDENT SAVINGS BALANCE IN CHINA

This is an empirical paper that explores the factors affecting the change in the savings balances in China. After extensive reading of existing studies, we will use the WLS regression model to conduct a regression analysis of several classical factors affecting the change in the savings balances and the new factors proposed in this paper, based on the reality of Eastern-Western differences in China. We provide evidence that six variables out of the eight factors we study are strongly correlated with the change in the savings balances. Further, we find that except for the Child dependency ratio, the other five variables are positively correlated with the change in savings balances. The purpose of this paper is to encourage the market to adjust development strategies, the government to adopt more targeted policies, and the society to give strong help to better guide residents' savings behavior by analyzing the factors that affect the change in savings balances at a macro level.

Demographic changes and savings behavior: the experience of a developing country

PurposeThis paper aims to disclose the savings behavior of Iran's economy in the context of demographic transition.Design/methodology/approachEmploying a version of Ramsey-Cass-Koopmans growth model, this paper benefits from a broad range of data and variables which are mainly taken from the Central Bank of Iran's database. The study uses actual and calculated data to produce analogous simulated data. The data cover the 1970–2015 period. This long period provides an opportunity to simulate more valid time series. It is worth noting that due to the severe economic sanctions imposed on the Iran's economy, particularly after 2017, some most recent data have been obliterated from the sample.FindingsThe results, stemming from the simulated model, hint that; firstly, the population variable is a notable determinant of the savings rate. Secondly, the effects of a slump in the population growth rate would attenuate the savings level significantly. Thirdly, other pragmatic steps could be taken to redress the fallout of the demographic changes.Research limitations/implicationsThere are some limitations in providing broad data related to economic sectors in Iran. The savings data, for instance, are available as an aggregated time series, and if the authors had wide data of household level, they would have been able to build more detail-based model. Similar to this issue of lack of households’ income-based data, some measures such as high or low levels as well as detailed demographic data could be helpful in sophisticated household level resulting. In addition, the complex relationship between the government and social security (pension) funds, in terms of financing part of government's budget deficit by these funds, thwarts a typical researcher in using comprehensive and transparent government expenditure data in their research. In other words, the possible positive or negative role of the funds, as a related issue to the demographic changes, cannot simply be determined in the model. It might be possible after necessary corrections are carried out in the mentioned relations.Originality/valueIn fact, the problem statement in this paper is to discern how the population aging can impact the saving rates on the one hand, and to what extent its repercussion can be modified by the other theoretical-based determinants on the other. In fact, the underlying argument of the present research arises from the stylized facts concerning prognosticates of the future evolutions of the world's population. To that end, the study will use Iran's economic and demographic data.

Influence of the Average per Capita Income on Credit and Savings Behavior of the Population in Russia

The successful functioning of the national economy is largely determined by the stability of its banking system. The article is aimed at studying the features of credit and savings behavior of the population based on the reporting data of the Central Bank of Russia and Rosstat for the period 01.02.2011 – 01.08.2020. It is proposed to characterize the features of such behavior based on an analysis of the relationship between the volumes of deposit and credit transactions of the population. The theoretical part of the article considers various aspects of determining the behavioral approach to savings: bank contribution, as a form of realization of investments; conservation as a form of reaction to instability; appeal to the bank as part of the fight against the economic crisis, etc. In the practical part of the study, using comparison and graphical analysis methods, 3 periods of transformation of these types of population behavior were identified based on a change in the relationship between the volume of debt on loans and the volume of deposits. Absolute parameters of marginal sizes of fluctuations of indicators of deposit and credit transactions for use in prognostic purposes were evaluated. The value of the deposit volume shift was calculated, which ensured a reduction in the size of the negative balance of deposit and loan operations in the domestic banking system during the crisis of 2015–2016, which contributed to the stability of this system. The analysis of the compared indicators showed the comparability of the dynamics of the change in the ratio of deposits and debt on loans with the dynamics of the average per capita monetary income of the population. The study revealed a stable increase in the volume of deposits of the population in most monthly indicators, which allows us to expect the stability of the banking system of Russia in terms of a balanced subsystem of deposit and credit operations.