Economic Shocks and Savings Behavior by the Rural Poor
Using data from 587 marginalized cooperative member households in rural Mexico, this paper examines how household formal financial savings fluctuates with economic shocks and other relevant variables. Regression results show that negative shocks, income, wealth, formal credit, distance from a bank branch, percent of non-working members in a household, and education have a significant influence on formal financial savings. Results from quantile regression show that the impact of negative shocks on formal savings is only statistically significant in households with a high propensity to save. These precautionary savings households not only save more, but are inclined to withdraw savings to alleviate potentially adverse personal income trends associated with the shocks.
Volume (Year): 31 (2011)
Issue (Month): 4 ()
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- Jeong-Joon Lee & Yasuyuki Sawada, 2005.
"Precautionary Saving under LiquidityConstraints: Evidence from Rural Pakistan,"
CIRJE-F-377, CIRJE, Faculty of Economics, University of Tokyo.
- Lee, Jeong-Joon & Sawada, Yasuyuki, 2010. "Precautionary saving under liquidity constraints: Evidence from rural Pakistan," Journal of Development Economics, Elsevier, vol. 91(1), pages 77-86, January.
- Gourinchas, Pierre-Olivier & Parker, Jonathan A, 2000.
"Consumption Over the Life-Cycle,"
CEPR Discussion Papers
2345, C.E.P.R. Discussion Papers.
- George-Marios Angeletos, 2001. "The Hyberbolic Consumption Model: Calibration, Simulation, and Empirical Evaluation," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 47-68, Summer.
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