Desired precautionary savings in the US

This study examines the factors that affect consumers' precautionary saving behaviors by using the data from the 1995 Survey of Consumer Finances. Due to the heteroscedasticity among the variances of disturbances, the generalized least squares (GLS) method is used. The findings reveal that age, gender, number of children, working years, education, occupation, race, permanent income, current income, net worth, credit constraints and social security benefits are significant factors that determine consumers' precautionary savings.