Determinants of Household Saving in Jimma Town

Damtew Getachew Sime (
economics, Jimma
June, 2016


The study examined the determinants of household saving in the case of Jimma town located in Oromia regional state using 371 households’ respondents through structured questionnaire. The study employed both descriptive and econometric method of data analysis. Descriptive statistics used to explain the measures of central tendency. Descriptive statistics shows that factors affecting saving level of households are inflation, unexpected and unforeseen expenditure, dependent families, distance from financial institution and availability of financial institutions negatively while source of income, spouse participation in income generating work, having income and expenditure plan, saving habit and having training from financial institutions are factors affecting saving level of house hold positively. Econometrics method employed tobit model using stata version 12.The study used nine explanatory variables age, sex, family sizes, dependent family, income, education, saving regularity, having income and expenditure plan and distance from financial institution. Among the nine explanatory variables the study found incomes and educations positively and family sizes negatively determine household saving and statistically significant that leads to low level of saving. Based on this government and non government commercial banks should have to access their branches to housed hold. Training on income and expenditure plan should have to given to household and education should be given to household on the advantages of saving.
Keywords: Determinants, household, saving, tobit model, Jimma, Ethiopia.