Browsing by Author "Tandoh, Andrew"

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    A micro-econometric analysis of household savings in Ghana
    (April 2016) Tandoh, Andrew
    The World Bank projected Ghana to be the fastest growing economy in Sub-Saharan Africa as Ghana witnessed 14% economic growth in 2011. Domestic savings are crucial in financing high capital formation which leads to increased productivity, sustained growth and development. Unfortunately, Ghana has never witnessed national savings rising above 20% of GDP. The study examined the determinants of household savings using Ghana Living Standards Survey Round six (GLSS-6) data, by estimating the likelihood that a given household will save with respect to household factors. The study proceeded to estimate Household level of savings following the model specification of Tobit (1958), censored from below zero. Demographic factors of region, quantile income distribution, location, gender, age, educational level and house size were found as significant determinants. The pattern of savings was found skewed towards developed regions. Household with higher education were more likely to save than those with no education. With regards to income-sources and savings relationship, marginal propensity to save out of self-employed non-agricultural income sources was no different for those with self-employed non-agricultural income and wage non-agricultural income sources. The estimated level of savings result showed that, the rich (those in higher income quantiles) save more than the poor (lowest income quantile). Those in higher income quantiles had significant marginal propensity to save more than household’s in the first (1st) quantile. The house size – savings profile was examined and found to be non-linear and statistically significant. The idea of low savings has been found to be an issue of one’s literacy status. Thus, financial literacy educational reforms should be put in place.