Home About Latest Browse RSS Advanced Search

Federal Reserve Bank of San Francisco
Working Paper Series
The determinants of household saving in China: a dynamic panel analysis of provincial data
Charles Yuji Horioka
Junmin Wan
Abstract

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, and (in some cases) the real interest rate and the inflation rate. However, we find that the variables relating to the age structure of the population usually do not have a significant impact on the household saving rate. 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 Full text
Cite this item
Charles Yuji Horioka & Junmin Wan, The determinants of household saving in China: a dynamic panel analysis of provincial data, Federal Reserve Bank of San Francisco, Working Paper Series 2007-28, 2007.
More from this series
JEL Classification:
Subject headings:
Keywords: Saving and investment - China
For corrections, contact Noah Pollaczek ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal