Factors Influencing Household Saving: Implications for the Financial Sector in the Use of Technology to Promote Saving

In view of the decline in personal saving rates across countries experienced for two decades since the 1980s, this study investigates the factors influencing household saving, and draws out the implications for the financial sector in the use of technology to promote saving amongst households. Recognizing the difficulty in obtaining quality data in regards to household finances, this study employed data from the 2004 U.S. Survey of Consumer Finances, which is a comprehensive household survey sponsored by the Federal Reserve Board of U.S., as a basis for empirical analysis. Using an ordered logit regression, results of the study reveal that the household's ability and opportunity to save are largely influenced by socio-demographic characteristics of the head of the family, suggesting that many opportunities exist in the use of technology to promote household saving. Although the study focuses on families in an advanced country (U.S.), certain aspects of saving behavior (e.g. the motives to save) may also apply to populations in other parts of the world.