Precautionary Saving from Different Sources of Income : Evidence from Rural Pakistan

Few studies have tried to measure how households in a developing country save from each of the different income sources at their disposal. To help fill that gap, the Author uses five-year panel data to examine how households in rural Pakistan save...

Full description

Bibliographic Details
Main Author:	Adams, Richard H., Jr.
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2013
Subjects:	SAVINGS BEHAVIOR HOUSEHOLD INCOME RURAL AREAS RURAL CREDIT INCOME GAPS MARGINAL COSTS REMITTANCES RENTAL PROPERTY PRECAUTIONARY PRINCIPLE INCOME VARIABILITY CAPITAL-OUTPUT RATIO CREDIT MARKETS AVERAGE RATE BASE YEAR CAPITAL INVESTMENT CONSUMPTION EXPENDITURE CONSUMPTION FUNCTION CONSUMPTION GROWTH DATA SET DATA SETS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DURABLE GOODS ECONOMIC DEVELOPMENT ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMIC STUDIES EMPIRICAL RESULTS EMPIRICAL STUDIES EMPLOYMENT EQUATIONS EXPECTED UTILITY EXPENDITURES FARM INCOME FOOD POLICY RESEARCH GROWTH RATE HETEROSKEDASTICITY HOUSEHOLD DATA HOUSEHOLD LEVEL HOUSEHOLD MEMBERS HOUSEHOLD SURVEY HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME INCOME COMPONENTS INCOME DISTRIBUTION INCOME GROUPS INCOME INEQUALITY INCOME QUINTILES INCOME SOURCE INCOME SOURCES INCOMES INFLATION INVESTMENT OPPORTUNITIES LINEAR RELATIONSHIP MARGINAL PROPENSITY TO CONSUME MARGINAL PROPENSITY TO SAVE MARGINAL UTILITY MEASUREMENT ERROR MEASUREMENT ERRORS MEASUREMENT PROBLEMS MPC MPS 0 HYPOTHESIS PERMANENT INCOME PERMANENT INCOME HYPOTHESIS POLITICAL ECONOMY POSITIVE RELATIONSHIP POVERTY REDUCTION PRIVATE SECTOR PRIVATE SECTOR EMPLOYMENT REAL RATE REAL RATE OF INTEREST REGRESSION ANALYSIS RISK AVERSION RURAL HOUSEHOLDS SAVINGS SIGNIFICANT DIFFERENCES SURVEY DATA UNDERESTIMATES VALUATION WEALTH WEIGHTED AVERAGE
Online Access:	http://documents.worldbank.org/curated/en/2002/01/1687154/precautionary-saving-different-sources-income-evidence-rural-pakistan http://hdl.handle.net/10986/15752

id	okr-10986-15752
recordtype	oai_dc
spelling	okr-10986-157522021-04-23T14:03:19Z Precautionary Saving from Different Sources of Income : Evidence from Rural Pakistan Adams, Richard H., Jr. SAVINGS BEHAVIOR HOUSEHOLD INCOME RURAL AREAS RURAL CREDIT INCOME GAPS MARGINAL COSTS REMITTANCES RENTAL PROPERTY PRECAUTIONARY PRINCIPLE INCOME VARIABILITY CAPITAL-OUTPUT RATIO CREDIT MARKETS AVERAGE RATE BASE YEAR CAPITAL INVESTMENT CONSUMPTION EXPENDITURE CONSUMPTION FUNCTION CONSUMPTION GROWTH DATA SET DATA SETS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DURABLE GOODS ECONOMIC DEVELOPMENT ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMIC STUDIES EMPIRICAL RESULTS EMPIRICAL STUDIES EMPLOYMENT EQUATIONS EXPECTED UTILITY EXPENDITURES FARM INCOME FOOD POLICY RESEARCH GROWTH RATE HETEROSKEDASTICITY HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD LEVEL HOUSEHOLD MEMBERS HOUSEHOLD SURVEY HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME INCOME COMPONENTS INCOME DISTRIBUTION INCOME GROUPS INCOME INEQUALITY INCOME QUINTILES INCOME SOURCE INCOME SOURCES INCOMES INFLATION INVESTMENT OPPORTUNITIES LINEAR RELATIONSHIP MARGINAL PROPENSITY TO CONSUME MARGINAL PROPENSITY TO SAVE MARGINAL UTILITY MEASUREMENT ERROR MEASUREMENT ERRORS MEASUREMENT PROBLEMS MPC MPS 0 HYPOTHESIS PERMANENT INCOME PERMANENT INCOME HYPOTHESIS POLITICAL ECONOMY POSITIVE RELATIONSHIP POVERTY REDUCTION PRIVATE SECTOR PRIVATE SECTOR EMPLOYMENT REAL RATE REAL RATE OF INTEREST REGRESSION ANALYSIS RISK AVERSION RURAL HOUSEHOLDS SAVINGS SIGNIFICANT DIFFERENCES SURVEY DATA UNDERESTIMATES VALUATION WEALTH WEIGHTED AVERAGE Few studies have tried to measure how households in a developing country save from each of the different income sources at their disposal. To help fill that gap, the Author uses five-year panel data to examine how households in rural Pakistan save from each of the seven separate sources of income. The author finds that households save from different sources of income at significantly different marginal rates. For example, the marginal propensity to save from external remittances (0.711) is much higher than that for rental income (0.085). As the precautionary model of saving suggests, the reasons for this relate to uncertainty: income that is more variable, tends to be saved at a higher marginal rate. Faced with incomplete capital, and credit markets, households in rural Pakistan save: for a rainy day" by putting away mainly those sources of income that are more variable, and uncertain. 2013-09-09T22:08:36Z 2013-09-09T22:08:36Z 2002-01 http://documents.worldbank.org/curated/en/2002/01/1687154/precautionary-saving-different-sources-income-evidence-rural-pakistan http://hdl.handle.net/10986/15752 English en_US Policy Research Working Paper;No. 2761 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research South Asia Pakistan
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	SAVINGS BEHAVIOR HOUSEHOLD INCOME RURAL AREAS RURAL CREDIT INCOME GAPS MARGINAL COSTS REMITTANCES RENTAL PROPERTY PRECAUTIONARY PRINCIPLE INCOME VARIABILITY CAPITAL-OUTPUT RATIO CREDIT MARKETS AVERAGE RATE BASE YEAR CAPITAL INVESTMENT CONSUMPTION EXPENDITURE CONSUMPTION FUNCTION CONSUMPTION GROWTH DATA SET DATA SETS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DURABLE GOODS ECONOMIC DEVELOPMENT ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMIC STUDIES EMPIRICAL RESULTS EMPIRICAL STUDIES EMPLOYMENT EQUATIONS EXPECTED UTILITY EXPENDITURES FARM INCOME FOOD POLICY RESEARCH GROWTH RATE HETEROSKEDASTICITY HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD LEVEL HOUSEHOLD MEMBERS HOUSEHOLD SURVEY HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME INCOME COMPONENTS INCOME DISTRIBUTION INCOME GROUPS INCOME INEQUALITY INCOME QUINTILES INCOME SOURCE INCOME SOURCES INCOMES INFLATION INVESTMENT OPPORTUNITIES LINEAR RELATIONSHIP MARGINAL PROPENSITY TO CONSUME MARGINAL PROPENSITY TO SAVE MARGINAL UTILITY MEASUREMENT ERROR MEASUREMENT ERRORS MEASUREMENT PROBLEMS MPC MPS 0 HYPOTHESIS PERMANENT INCOME PERMANENT INCOME HYPOTHESIS POLITICAL ECONOMY POSITIVE RELATIONSHIP POVERTY REDUCTION PRIVATE SECTOR PRIVATE SECTOR EMPLOYMENT REAL RATE REAL RATE OF INTEREST REGRESSION ANALYSIS RISK AVERSION RURAL HOUSEHOLDS SAVINGS SIGNIFICANT DIFFERENCES SURVEY DATA UNDERESTIMATES VALUATION WEALTH WEIGHTED AVERAGE
spellingShingle	SAVINGS BEHAVIOR HOUSEHOLD INCOME RURAL AREAS RURAL CREDIT INCOME GAPS MARGINAL COSTS REMITTANCES RENTAL PROPERTY PRECAUTIONARY PRINCIPLE INCOME VARIABILITY CAPITAL-OUTPUT RATIO CREDIT MARKETS AVERAGE RATE BASE YEAR CAPITAL INVESTMENT CONSUMPTION EXPENDITURE CONSUMPTION FUNCTION CONSUMPTION GROWTH DATA SET DATA SETS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DURABLE GOODS ECONOMIC DEVELOPMENT ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMIC STUDIES EMPIRICAL RESULTS EMPIRICAL STUDIES EMPLOYMENT EQUATIONS EXPECTED UTILITY EXPENDITURES FARM INCOME FOOD POLICY RESEARCH GROWTH RATE HETEROSKEDASTICITY HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD LEVEL HOUSEHOLD MEMBERS HOUSEHOLD SURVEY HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME INCOME COMPONENTS INCOME DISTRIBUTION INCOME GROUPS INCOME INEQUALITY INCOME QUINTILES INCOME SOURCE INCOME SOURCES INCOMES INFLATION INVESTMENT OPPORTUNITIES LINEAR RELATIONSHIP MARGINAL PROPENSITY TO CONSUME MARGINAL PROPENSITY TO SAVE MARGINAL UTILITY MEASUREMENT ERROR MEASUREMENT ERRORS MEASUREMENT PROBLEMS MPC MPS 0 HYPOTHESIS PERMANENT INCOME PERMANENT INCOME HYPOTHESIS POLITICAL ECONOMY POSITIVE RELATIONSHIP POVERTY REDUCTION PRIVATE SECTOR PRIVATE SECTOR EMPLOYMENT REAL RATE REAL RATE OF INTEREST REGRESSION ANALYSIS RISK AVERSION RURAL HOUSEHOLDS SAVINGS SIGNIFICANT DIFFERENCES SURVEY DATA UNDERESTIMATES VALUATION WEALTH WEIGHTED AVERAGE Adams, Richard H., Jr. Precautionary Saving from Different Sources of Income : Evidence from Rural Pakistan
geographic_facet	South Asia Pakistan
relation	Policy Research Working Paper;No. 2761
description	Few studies have tried to measure how households in a developing country save from each of the different income sources at their disposal. To help fill that gap, the Author uses five-year panel data to examine how households in rural Pakistan save from each of the seven separate sources of income. The author finds that households save from different sources of income at significantly different marginal rates. For example, the marginal propensity to save from external remittances (0.711) is much higher than that for rental income (0.085). As the precautionary model of saving suggests, the reasons for this relate to uncertainty: income that is more variable, tends to be saved at a higher marginal rate. Faced with incomplete capital, and credit markets, households in rural Pakistan save: for a rainy day" by putting away mainly those sources of income that are more variable, and uncertain.
format	Publications & Research :: Policy Research Working Paper
author	Adams, Richard H., Jr.
author_facet	Adams, Richard H., Jr.
author_sort	Adams, Richard H., Jr.
title	Precautionary Saving from Different Sources of Income : Evidence from Rural Pakistan
title_short	Precautionary Saving from Different Sources of Income : Evidence from Rural Pakistan
title_full	Precautionary Saving from Different Sources of Income : Evidence from Rural Pakistan
title_fullStr	Precautionary Saving from Different Sources of Income : Evidence from Rural Pakistan
title_full_unstemmed	Precautionary Saving from Different Sources of Income : Evidence from Rural Pakistan
title_sort	precautionary saving from different sources of income : evidence from rural pakistan
publisher	World Bank, Washington, DC
publishDate	2013
url	http://documents.worldbank.org/curated/en/2002/01/1687154/precautionary-saving-different-sources-income-evidence-rural-pakistan http://hdl.handle.net/10986/15752
_version_	1764429779594903552

Precautionary Saving from Different Sources of Income : Evidence from Rural Pakistan

Similar Items