NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Determinants of Household Saving in China: A Dynamic Panel Analysis of Provincial Data

Charles Yuji Horioka, Junmin Wan

NBER Working Paper No. 12723
Issued in December 2006
NBER Program(s):   AG   EFG

In this paper, we conduct a dynamic panel analysis of the determinants of the household saving rate in China using a life cycle model and panel data on Chinese provinces for the 1995-2004 period from China?s household survey. We find that China?s household saving rate has been high and rising and that the main determinants of variations over time and over space therein are the lagged saving rate, the income growth rate, (in many cases) the real interest rate, and (in some cases) the inflation rate. However, we find that the variables relating to the age structure of the population have the expected impact on the household saving rate in only one of the four samples. These results provide mixed support for the life cycle hypothesis as well as the permanent income hypothesis, are consistent with the existence of inertia or persistence, and imply that China?s household saving rate will remain high for some time to come.

download in pdf format
   (226 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (226 K) or via email.

This paper was revised on September 6, 2007

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w12723

Published: Charles Yuji Horioka & Junmin Wan, 2007. "The Determinants of Household Saving in China: A Dynamic Panel Analysis of Provincial Data," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(8), pages 2077-2096, December. citation courtesy of

Users who downloaded this paper also downloaded these:
Curtis, Lugauer, and Mark w16828 Demographic Patterns and Household Saving in China
Yang, Zhang, and Zhou w16771 Why Are Saving Rates so High in China?
Chamon and Prasad w14546 Why are Saving Rates of Urban Households in China Rising?
Wei and Zhang w15093 The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China
Denizer and Wolf w6457 Household Savings in Transition Economies
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us