Determinants of Household Saving Using Linear Regression Model. Evidence in Italian Regions

Abstract

Household saving decisions have always attracted the attention of researchers and policymakers. In fact, an increase in savings increases investments and this is reflected in an improvement in the standard of living of householders. Therefore, the focus of this article is on the determinants of household saving decisions in Italian regions. The savings of Italian families are represented by the volume of bank and postal deposits (set aside income) and the volume of indirect collections (invested income), while the determinants of savings are chosen after having conducted a review of the literature on the socio-economic context, economic aspects and demographic factors that have a greater impact on household savings. From the methodological point of view, the study uses a multiple linear regression model to evaluate the possible functional relationship between saving (dependent variable) and its determinants (independent variables). The regression model was built considering two dependent variables: Volume of bank and postal deposits (model A) and volume of indirect collections (model B). Data refer to the 20 Italian regions and they are extrapolated by the Statistical Data Base (BDS) of the Bank of Italy and the Istat website. From the results of both models, it emerges that economic uncertainty could fuel the savings accumulated for precautionary purposes. This study represents a starting point for investigating the saving phenomenon, increasing the observed variables with other factors that can affect saving, in order to formulate any new hypotheses for further future studies.