Determinants of Household Saving the case of Boditi Town, Wolaita Zone, Ethiopia

The study was conducted to identify factors affecting household saving in Boditi town. Data for the study was collected from 369 households from five Kebeles. Both primary and secondary sources were used for this study and multi-stage sampling technique was used to contact with the study units (households). To attain the objectives of the study the researcher used both descriptive and econometric analysis. With descriptive analysis percentages, figures, graphs, charts and tables were used to present determinants of private saving. The result shows that 181 respondents having family size 1 to 4, 102 households with family size 5 to 6 and the remaining respondents 86 with family size greater than 7. Most of the respondents were under age category 36 to 60 and their response to saving is highest than the rest of age category. Highest number of the respondents were educated secondary and diploma and above and their response to saving is greater than other education categories, the illiterate household’s response to saving is lower which is due to low awareness to life style, low awareness to Saving, less involvement in other income generating activity. In logistic regression analyses the variables that are positively related with the probability of saving are household head age, sex, marital status, household education, credit, annual income and interest rate. The variables that are negatively correlated with the probability of saving are family size, distance from financial institution, distance from market and annual consumption expenditure. From 11explanatory variables, 6 of the variables: family size of the household, household head sex, access to financial institution, credit access, annual income and interest rate have a significant effect on households saving at 1 percent and 5 percent significance level.

Keywords: Household Saving, Binary Logit Model, Boditi towna