Purpose of Savings and its Determinants in Case of Destitute Population An Empirical Analysis of Slum Dwellers

Authors

  • Firdous Ahmad Malik Doctoral Fellow, Department of Economics, BBAU, Lucknow, Uttar Pradesh-226025 (malikfirdouscrc@gmail.com)
  • D.K. Yadav Dr., Assistant Professor, Department of Economics, BBAU, Lucknow, Uttar Pradesh-226025(dev1985icfai@gmail.com)
  • Andleeb Ismail Doctoral Fellow., Pakistan Institute of Developmental Economics, (PIDE), Quaid -I-Azam University Campus, P.O. Box. 1091, Islamabad 44000 (andleeb779@yahoo.com)

DOI:

https://doi.org/10.46291/IJOSPERvol7iss3pp499-517

Keywords:

Theoretical, Savings, Poor, Banking, Institutional etc

Abstract

Research has shown that poor people living in under developing countries are saving less, little is known about the responsible factors which influence savings of these poor urban groups.  The following study is based on Theoretical perspectives for examining the nature of savings among Slum dwellers in Lucknow. Three perspectives have been analysed in the study which are Individual capabilities-oriented perspectives, Sociological perspectives and Institutional mechanism (supply-oriented approach) towards the marginal sections of the society. The responsible factors for low savings are due to monopoly-based supply-oriented banking discipline, financial illiteracy, income of the people etc. Findings of the paper suggests that poor people are worth to save and are saving, particularly if both the banking and institutional barriers are removed and made more inclusive so that poor people themselves try to come out from the problem of poverty.

References

Abdelkhalek, T., Arestoff, F., de Freitas, N. E. M., & Mage, S. (2009). A microeconometric analysis of households saving determinants in Morocco. The 1st GDRI DREEM Conference, Istanbul, 21-23 May 2009.

Agrawal, P., Sahoo, P., & Dash, R. K. (2007). Savings behavior in India: Co-integration and causality evidence. The Singapore EconomicReview, 55, 273-295. doi:10.1142/S0217590810003717

Ashraf, N., Gons, N., Karlan, D. S., & Yin, W. (2003). A Review of Commitment Saving Products in Developing Countries. Asian Development Bank (ADB).

Athukorala, P., & Sen, K. (2004). The determinants of private saving in India. World Development, 32, 491-503. doi:10.1016/j.worlddev.2003.07.008

Bersales, L. G. S., &Mapa, D. S. (2006). Patterns and determinants of household saving in the Philippines (EMERGE Technical Report).Makati City: EMERGE.

Beverly, S., & Sherraden, M. (1999). Institutional determinants of saving: Implications for low-income households and public policy. Journal of Socio-Economics, 28, 457-473. doi:10.1016/S1053-5357(99)00046-3

Carroll, C. D., &Samwick, A. A. (1998). How Important is Precautionary Saving? The Review ofEconomics and Statistics, 80(3), 410-419.

Chowa, G. A., Masa, R. D., &Ansong, D. (2012). Determinants of saving among low-income individuals in rural Uganda: Evidence from assets Africa. Advances in Applied Sociology, 2(04),280.

Cornia, G., &Jerger, G. (1982). Rural vs. urban saving behavior: Evidence from an ILO collection of household surveys. Developmentand Change, 13, 123-157. doi:10.1111/j.1467-7660.1982.tb00115.x

Crown, W. H. (2002). Life cycle theories of savings and consumption. Encyclopedia of Aging.[Online]. Available: http [Accessed 9 May. 2012]

D’Souza, V. S. (1981). Inequality and its perpetuation: A theory of social stratification. New Delhi: Manohar.

Deaton, A. (1989). Saving in Developing Countries: Theory and Review. Proceedings of the World Bank, Annual Conference on Development Economics. Washington, DC: World Bank.

Friedman, M. (1957). A Theory of the Consumption Function. Princeton University Press.

Helmy, I. A. F. (2015). Understanding the saving behavior of poor households: evidence from Egypt (Doctoral dissertation, The American University in Cairo).

Karlan, D., &Morduch, J. (2009). Ideas and Evidence: The Economics of Saving. In D. Karlan, & J. Morduch, Handbook of Development Economics (5 ed.).

Katona, G. (1975). Psychological economics. New York: Elsevier.

Keynes, J. M. (1937). The general theory of employment. The quarterly journal of economics, 51(2), 209-223.

Keynes, J. M. (2016). General theory of employment, interest and money. Atlantic Publishers & Dist.

Kibet, L. K., Mutai, B. K., Ouma, D. E., Ouma, S. A., &Owuor, G. (2009). Determinants of household saving: Case study of smallholder farmers, entrepreneurs and teachers in rural areas of Kenya. Journalof Development and Agricultural Economics, 1, 137-143.

Kiiza, B., & Pederson, G. (2002). Household financial savings mobilization: Empirical evidence from Uganda. Journal of African Economies,10, 390-409. doi:10.1093/jae/10.4.390

Lee, J.-J., & Sawada, Y. (2010). Precautionary saving under liquidity constraints: Evidence from rural Pakistan. Journal of Development Economics, 91(1), 77–86.

Loayza, N., Schmidt-Hebbel, K., &Servén, L. (2000). Saving in Developing Countries: AnOverview. World Bank Economic Review, 14(3), 393-414.

Mason, A. (1988). Saving, economic growth, and demographic change. Population and Development Review, 14, 113-144. doi:10.2307/1972502

Meghir, C. (2004). A Retrospective on Friedman’s Theory of Permanent Income. UniversityCollege London and Institute for Fiscal Studies.

Mikesell, R. F., &Zinser, J. E. (1973). The Nature of The Savings Function in DevelopingCountries: A Survey of the Theoretical and Empirical Literature. Journal of Economic Literature, 11(1), 1-26.

Modigliani, F., & Ando, A. K. (1957). Tests of the life cycle hypothesis of savings. Bulletin of the Oxford Institute of Statistics, 19, 99-124.

Modigliani, F., &Brumberg, R. (1954). Utility analysis and the consumption function: aninterpretation of cross-section data. MIT press books.

Schmidt-Hebbel, K., Webb, S. B., &Corsetti, G. (1992). Household saving in developing countries: First cross-country evidence. TheWorld Bank Economic Review, 6, 529-547.doi:10.1093/wber/6.3.529

Sherraden, M. (1991). Assets and the poor: A new American welfare policy. Armonk, NY: M.E. Sharpe, Inc.

Sherraden, M., Schreiner, M., & Beverly, S. (2003). Income, institutions, and saving performance in individual development accounts. Economic Development Quarterly, 17, 95-112. doi:10.1177/0891242402239200

Sørensen, A. (2000). Toward a sounder basis for class analysis. American Journal of Sociology, 105, 1523-1558. doi:10.1086/210463

Thaler, R. H., &Shefrin, H. M. (1981). An economic theory of selfcontrol. Journal of Political Economy, 89, 392-401. doi:10.1086/260971

urRehman, H., Bashir, F., &Faridi, M. Z. (2011). Saving behaviour among different income groups in Pakistan: A micro study. InternationalJournal of Humanities and Social Science, 1, 268-277.

Wärneryd, K. E. (1999). The psychology of saving: A study on economic psychology. Northampton, MA: Edward Elgar.

World Bank. (2008). Finance for All? Policies and Pitfalls in Expanding Access. Washington, DC:World Bank.

Published

2020-09-03

How to Cite

Malik, F. A., D.K. Yadav, & Ismail, A. (2020). Purpose of Savings and its Determinants in Case of Destitute Population An Empirical Analysis of Slum Dwellers. International Journal of Social, Political and Economic Research, 7(3), 499-517. https://doi.org/10.46291/IJOSPERvol7iss3pp499-517

Issue

Section

Articles