Abdul Jalil, Ahmad Zafarullah (2009): The importance of precautionary saving motive among Indonesian households. Published in: Journal of Indonesian Economy and Business , Vol. 24, No. 2 (2009): pp. 221-231.
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In the developing world, the population is frequently faced with numerous natural, economic, institutional and market risks. Because of these uncertainties, many individuals and households experience difficult periods of unexpected reduction in income. Using panel data from the Indonesian Family Life Survey (IFLS), this paper tests the existence of precautionary saving associated with income risk in Indonesia. The results of the estimation show that the uncertainty variable is not significantly related to the growth of consumption which signifies that Indonesian households do not constitute precautionary saving to smooth their consumption. The finding may be explained by the fact that Indonesian households have in their possession other type of support mechanisms based particularly on inter-generational and -communal solidarity.
|Item Type:||MPRA Paper|
|Original Title:||The importance of precautionary saving motive among Indonesian households|
|Keywords:||Uncertainty; Income Risks; Precautionary Savings|
|Subjects:||D - Microeconomics > D1 - Household Behavior and Family Economics > D13 - Household Production and Intrahousehold Allocation
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty
D - Microeconomics > D9 - Intertemporal Choice and Growth > D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving
|Depositing User:||Ahmad Zafarullah Abdul Jalil|
|Date Deposited:||20. Sep 2010 16:45|
|Last Modified:||15. Feb 2013 23:22|
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