Demographics and saving behavior of households in rural areas of Vietnam: An empirical analysis. This paper studies the saving behavior of rural households in Vietnam from two asp ects: volume of savings and methods of saving. Two econometric models are con- ducted, the first one is a panel data model, used to examine the determinants of household saving. | Journal of Economics and Development Vol. 15, , August 2013, pp. 5 - 18 ISSN 1859 0020 Demographics and Saving Behavior of Households in Rural Areas of Vietnam: An Empirical Analysis Nguyen Thi Minh National Economics University, Vietnam Email: minhkthn@ Nguyen Hong Nhat National Economics University, Vietnam Trinh Trong Anh National Economics University, Vietnam Phung Minh Duc National Economics University, Vietnam Le Thai Son National Economics University, Vietnam Abstract This paper studies the saving behavior of rural households in Vietnam from two aspects: volume of savings and methods of saving. Two econometric models are conducted, the first one is a panel data model, used to examine the determinants of household saving; and the second one is a multinomial logit model used to investigate how a household chooses the way to save. Both models are based on the life cycle theory of saving and the permanent income hypothesis. We find that the household head’s age, education and gender are closely related to their saving behavior. And the impact of these variables takes different patterns between the two models. The results are useful for further research in forecasting household savings as well as in micro finance to find a better way of serving people who live in rural areas. Keywords: Demographics, saving behavior, households, rural areas, Vietnam. Journal of Economics and Development 5 Vol. 15, , August 2013 1. Introduction Another important aspect of household saving is the method of saving. In Vietnamese rural areas, households often use traditional methods to invest their money, such as private loans, buying gold or foreign currency and keeping them at home. These types of savings are not encouraged in a modern society: While private loans are not protected by laws and that can lead to fraud – in effect this has happened often in the past. Buying gold or foreign currency is a safe channel of saving but it does not contribute the .
