Household Savings in South Africa: An Econometric Analysis

Itumeleng Pleasure Mongale; Janine Mukuddem-Petersen; Mark A. Petersen; Christelle Meniago

Authors

Itumeleng Pleasure Mongale Department of Economics, Faculty of Commerce and Administration, North-West University (Mafikeng Campus), South Africa
Janine Mukuddem-Petersen Graduate School of Business and Government Leadership, Faculty of Commerce and Administration, North-West University (Mafikeng Campus), South Africa
Mark A. Petersen Faculty of Commerce and Administration, North-West University (Mafikeng Campus), South Africa
Christelle Meniago Department of Economics, Faculty of Commerce and Administration, North-West University (Mafikeng Campus), South Africa

Abstract

This paper examines the determinants of household savings in South Africa by utilizing time series data from the South African Reserve Bank. The household savings model is estimated by using the cointegrating vector autoregressive (CVAR) framework. To check robustness on the cointegration results, we employ generalized impulse response function (GIRF) analysis and variance decomposition. The findings show that all the variables have unit roots and cointegration emphasizes the presence of a long run equilibrium relationship. The results indicate that household savings is mainly influenced by a high level of household debt.

DOI: 10.5901/mjss.2013.v4n13p519