Determinants of Household Saving: A Case Study of Kabul Afghanistan

Household saving is a source of investment and is regarded as a key factor in economic growth. This study is an effort to examine the determinants of household saving in Kabul, Afghanistan. The several economic and socio-demographic factors that affect household saving have been completely examined in this study. The data were collected through a well-structured questionnaire from 384 households. Through stratified random sampling, 384 household’s heads were interviewed. For statistical investigation we applied Diagnostic test and Generalized Least Square (GLS) methods to our model. It is observed from the estimated result of this study that income is a major and most important determinant of household saving which positively affects the saving of a household. Further, results also reveal that household size has negative and significant relationship with household saving. The educational level of the household head shows a negative impact on household saving. The results further indicate that married household head and male household head are likely to save more as compared to unmarried household head and female household head respectively. Moreover, age of the household head confirms the Life-Cycle-Hypothesis. The results reveal that with the increase in age at middle age of an individual the saving increases, however it decreases at the latter age of life