Saving behaviour in a transition economy: An empirical case study of rural China
Author(s)
Wan, G.
Shi, Q.
Tang, Sumei
Griffith University Author(s)
Year published
2003
Metadata
Show full item recordAbstract
Using a large set of household-level survey data, this paper explores determinants of saving behaviour in rural China. The rich specification of the model, necessarily ad hoc, enables consideration of an extensive array of variables. It is found that (a) liquidity constraints, precautionary motives and industrialisation conribute positively to the unusually high saving rate in China; (b) culture is a significant factor in helping explain inter-regional differences in saving rate; (c) the life cycle hypothesis is rejected since a "U-pattern", contrary to the commonly claimed "hump", is discovered; and (d) the permanent income ...
View more >Using a large set of household-level survey data, this paper explores determinants of saving behaviour in rural China. The rich specification of the model, necessarily ad hoc, enables consideration of an extensive array of variables. It is found that (a) liquidity constraints, precautionary motives and industrialisation conribute positively to the unusually high saving rate in China; (b) culture is a significant factor in helping explain inter-regional differences in saving rate; (c) the life cycle hypothesis is rejected since a "U-pattern", contrary to the commonly claimed "hump", is discovered; and (d) the permanent income hypothesis is not accepted as wealth is found to be negatively related to savings.
View less >
View more >Using a large set of household-level survey data, this paper explores determinants of saving behaviour in rural China. The rich specification of the model, necessarily ad hoc, enables consideration of an extensive array of variables. It is found that (a) liquidity constraints, precautionary motives and industrialisation conribute positively to the unusually high saving rate in China; (b) culture is a significant factor in helping explain inter-regional differences in saving rate; (c) the life cycle hypothesis is rejected since a "U-pattern", contrary to the commonly claimed "hump", is discovered; and (d) the permanent income hypothesis is not accepted as wealth is found to be negatively related to savings.
View less >
Journal Title
Savings and Development
Volume
27
Issue
4
Publisher URI
Subject
Multi-Disciplinary