Abstract:
This study is conducted under the title “Determinants of Urban Household Saving Behavior in
Ambo Town, Ethiopia.” Its main objective was to empirically investigate the saving practices
and determinants of urban household saving behavior in Ambo town, Ethiopia. Cross-sectional
primary data was collected using self-administered open-ended and closed-ended questionnaires
from 150 households in two kebeles of Ambo town. Selection of the sample was done by two stage stratified sampling techniques, where the first stage units were kebels and the second stage
units were households. Descriptive statistics and a binary logistic regression model were used to
test the formulated hypotheses. The study found that Age of households, education level of
households, inflation rate, total household income, and saving experience had a positive and
significant impact on household saving. The governing saving motive found in this study was a
precautionary motive. The study recommended that the government, in collaboration with
financial institutions, should promote household saving by introducing different packages of
prize-linked promotional savings; the government should continue and spend the utmost effort to
stabilize inflationary pressures using short-term and long-term strategies; and the government
should strive to increase the disposable income of households. This study focused on household
savings using only financial savings and employed a smaller sample and a binary logit
regression model.
