Exploratory Study: the Pakistani Household Perspective

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Household saving pattern and investment trends: an exploratory study of Pakistani household: from household perspective.

(Aneela Khalid)

Abstract:
Introduction
Household saving Pattern and Investment trends are a very important factor to understand the economy of any country because holds combine to form a community that in combination make civilizations and countries. Purpose

This paper focus on developing an understanding about the investment and saving behavior of Pakistani households. Further a link between different variables of investment and savings will be analyzed. This study will help the investors to explore new opportunities for business. Methodology/design/approach

The respondents are the households around the country. This will include rural and urban Population representation. To maintain reliability and validity the representation of each province will be made mandatory according to the ratio of their population. Findings

The data from the respondents show that family type has a great impact on the investment and savings behavior of households. Further saving and investments are determined by the income levels. Most households prefer investing in property rather than the stocks and bonds. Key words

Investment, Savings, Household, Income, Expenditure, Consumption and saving patterns. Paper type
This is an exploratory research paper.
Methodology:
Respondents/ Population:
The study will be conducted all around Pakistan that comprises of the almost 18 crore Population. The respondents will be the households from all income levels. Sample Frame:
Households from rural an urban areas of each province.
Sample Design:
The Sampling method that I have chosen on the basis of the nature of the research I am in is stratified sampling. Within each province I will take representation from both rural and urban population on the basis of their income levels and family Types. All Subgroups will not have equal number of elements thus I will use Disproportionate Stratified sampling.(According to Uma Sekaran and Roger Bougie’s book Research Methods for Business 5th Edition). Sample Size:

The Sample that I have chosen for the representation of the whole Population will be 384(According to Uma Sekaran and Roger Bougie’s book Research Methods for Business 5th Edition). Literature Review

History of savings and Investment:
The phenomenon of saving and investment is as old as the mankind itself.in old tribes and civilizations were engaged in saving and investment processes like saving of food, crops etc. saving and investment has always been an ethical issue across civilizations. On micro level people allowed each other to use their saved funds against some specific amount of interest. The saving and investment process has always been given importance Islamic teachings also prevent the accumulation of money and wealth and it also not allow individuals to utilize this money on luxuries and comfort. Saving and investment behavior in Pakistan

The common trends of saving and investment are discussed in the following tables. The government has launched many schemes year to year to increase the overall rate of saving in Pakistan but due to factors like income level, consumption behavior and most importantly the improper implementation of the policies. The desired saving rates were not achieved. In the graph and table below it is clear that the GDP, investment and savings the three are positively related. The years in which saving and investment has decreased ultimately the GDP has also decreased and in years where both have increased the GDP has also increased. From the table it is clear that increased GDP rate ultimately increased the saving rate for the coming year. The 7.56 percent growth in GDP in 1981-1982 leads to a 33.9 percent growth in savings similarly 8.71 percent growth of GDP in 1984-1985 stimulated 25.5 percent growth in national savings. The negative growth rate of...
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