Household Saving in Pakistan: Some Findings from Time-Series Data (Report‪)‬

The paper tests some household savings hypotheses with time-series data for Pakistan over the 1950-51-1976-77 period. The permanent income model is round to give a much better explanation of the year-to-year variations in household saving than does the simple current income model. Among other findings is a highly significant correlation between changes in the real rate of return on financial assets and household saving. Very little quantitative work has been done in the past for the study of saving behaviour in Pakistan. A few studies that have attempted a quantification of some relevant behavioural relationships have, for the most part, been confined to estimating simple bivariate relationships between saving/consumption and income. (1) A major reason for this appears to have been the lack of proper data on saving in the country. The savings estimates available thus far were too aggregative in character; having been derived residually from the national accounts, they supplied little or no information on the sectoral or asset-wise structure of aggregate savings.