Social Influence And Savings Behavior: Evidence From A Developing Country Context

Main Article Content

Eva Mpaata
Naomy Koskei
Ernest Saina


Purpose: This paper highlights the relevance of Savings Behavior and the impact of Social Influence on Savings Behavior in a developing country utilizing both life cycle and economic theories

Methodology: This paper presents findings from a thorough review of the literature. Relevant articles were reviewed on both savings behavior and social influence. The articles consisted of both contexts developed versus developing.

Findings: The findings suggest that from the developed country context, Social Influence positively affects Savings Behavior, which is not the case for the developing economies that show the negative impact of social influence on savings behavior. Therefore, financial education and literacy training are two of the means of encouraging individual self-control in these developing economies despite their vulnerability to social influence to encourage positive savings behavior.

Implications: Individuals are encouraged to save, especially during their productive ages, along with their lifespan. This can be done by obligatory deductions for those that are officially employed.

Originality/Value: This paper reveals a bibliography theoretical review on Social Influence and Savings Behavior within the developing country context. The paper presents the puzzle about the effect of Social Influence and Savings Behavior in the emerging economy. The majority of savings behavior research undertaken in the developed economies shows the positive effect of social influence on savings behavior, which is not the case in the developing economies.


Download data is not yet available.

Article Details

Mpaata, E., Koskei, N. ., & Saina, E. (2020). Social Influence And Savings Behavior: Evidence From A Developing Country Context. SEISENSE Journal of Management, 3(4), 56-67.
Research Articles

Copyright (c) 2020 Eva Mpaata, Naomy Koskei, Ernest Saina

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Alwi, S., Amir Hashim, I. Z., & Ali, M. S. (2015). Factors affecting savings habits within millennials in Malaysia: Case study on students of Taylor’s University. Paper presented at The Fourth Asia-Pacific Conference on Global Business, Economics, Finance and Social Sciences.

Ando, A., & Modigliani, F. (1963). The" life cycle" hypothesis of saving: Aggregate implications and tests. The American economic review, 53(1), 55-84.

Ariffin, M. R., Sulong, Z., & Abdullah, A. (2017). Students’ Perception towards Financial Literacy and Saving Behavior. World Applied Sciences Journal, 35(10), 2194-2201.

Asare, E., Segarra, E., Gertrude, N., & Asiseh, F. (2018). Explaining the Saving Behavior of Households’ in Ethiopia, Africa. Applied Economics and Finance, 5(2), 143-151. DOI:

Awais, M., Laber, M. F., Rasheed, N., & Khursheed, A. (2016). Impact of Financial Literacy and Investment Experience on Risk Tolerance and Investment Decisions: Empirical Evidence from Pakistan. International Journal of Economics and Financial Issues, 6(1), 73-79.

Bonga-Bonga, L., & Guma, N. (2017). The relationship between savings and economic growth at the disaggregated level. Economia Internazionale, 70(1), 1-24.

Bowen, C. F. (2002). Financial knowledge of teens and their parents. Financial counseling and planning, 13(2), 93-102.

Browning, M., & Lusardi, A. (1996). Household saving: Micro theories and micro facts. Journal of Economic Literature, 34(4), 1797-1855.

Bucciol, A., & Veronesi, M. (2014). Teaching children to save: What is the best strategy for lifetime savings? . Journal of Economic Psychology(45), 1-17. DOI:

Chowa, G. A., Masa, R. D., & Sherraden, M. (2012). Wealth effects of an asset-building intervention among rural households in Sub-Saharan Africa. Journal of the Society for Social Work and Research, 3(329-345). DOI:

Collins, J., & Hussey, R. (2009). Business Research: A practical guide for undergraduate and postgraduate students (3 ed.). New York: Palgrave Macmillan.

Dangol, J., & Maharjan, S. (2018). Parental and Peer Influence on the Saving Behavior of the Youth. Nepal: Tribhuvan University.

De Noose, C. (2011). Best Practices in Microsaving for Successfully and Sustainably Reaching the Poor.

Deaton, A. (2005). Measuring poverty in a growing world (or measuring growth in a poor world). Review of Economics and Statistics, 87(1), 1-19. DOI:

Demirguc-Kunt, A., Klapper, L., Singer, D., & Van Oudheusden, P. (2015). The Global Findex Database 2014: Measuring Financial Inclusion around the World. Retrieved from Washington, DC: DOI:

Duflo, E., & Saez, E. (2002). Participation and investment decisions in a retirement plan: The influence of colleagues’ choices. Journal of Public Economics, 85(1), 121-148. DOI:

Dupas, P., & Robinson, J. (2013). Savings constraints and microenterprise development: Evidence from a field experiment in Kenya. American Economic Journal: Applied Economics, 5(1), 163-192. DOI:

Elias, S., & Worku, A. (2015). Causal relationship between gross domestic saving and economic growth in east Africa: evidence from Ethiopia, Uganda and Kenya. Journal of Agriculture and Social Research (JASR), 15(2), 31-39.

Erskine, M., Kier, C., Leung, A., & Sproule, R. (2006). Peer crowds, work experience, and financial saving behavior of young Canadians. Journal of Economic Psychology, 27(2), 262-284. DOI:

Findley, T. S., & Caliendo, F. N. (2015). Time Inconsistency and Retirement Choice Economics Letters(129), 4-8. DOI:

Firmansyah, D. (2014). The Influence of Family Backgrounds toward Student Saving Behavior: A Survey of College Students in Jabodetabek. International Journal of Scientific and Research Publication,, 4(1), 1-6.

Franzoi, S. L. (2006). Social psychology (Vol. 4th ed.). New York:: McGraw-Hill.

Geda, A., & Shimeless, A. (2006). Openness, inequality and poverty in Africa. Retrieved from

Gerhard, P., Gladstone, J. J., & Hoffmann, A. O. (2018). Psychological characteristics and household savings behavior: The importance of accounting for latent heterogeneity. Journal of Economic Behavior & Organization, 148, 66-82. DOI:

Gourinchas, P. O., & Parker, J. A. (2002). Consumption over the life cycle Econometrica, 70(1), 47-89. DOI:

Herawati, N. T., Candiasa, I. M., Yadnyana, I. K., & Suharsono, N. (2018). Factors That Influence Financial Behavior among Accounting Students in Bali. International Journal of Business Administration, 9(3), 30-38. DOI:

Hira, T. K. (1997). Financial attitudes, beliefs and behaviors: Differences by age. Journal of Consumer Studies and Home Economics, 21, 271-290. DOI:

Homan, A. M. (2016). The influence of parental financial teaching on saving and borrowing behavior. (Masters), University of University of Groningen.

Jamal, A. A. A., Ramlan, W. K., Karim, M. A., & Osman, Z. (2015). The effects of social influence and financial literacy on savings behavior: A study on students of higher learning institutions in Kota Kinabalu, Sabah. International Journal of Business and Social Science, 6(11), 110-119.

Jappelli, T., & Modigliani, F. (1998). The age-saving profile and the lifecycle hypothesis. CSEF working paper, (No. 9).

Joshi, A., Pradhan, S., & Bist, J. P. (2019). Savings, investment, and growth in Nepal: an empirical analysis. Financial Innovation, 5(1). DOI:

Kaberuka, W., & Namubiru, R. (2014). The effect of remittances on gross domestic savings in Uganda (1999-2011). International Journal of Business Management and Administration, 3(2), 29-39.

Karlan, D., Ratan, A. L., & Zinman, J. (2014). Savings by and for the Poor: A Research Review and Agenda. Review of Income and Wealth, 60(1), 36-78. DOI:

Kast, F., Meier, S., & Pomeranz, D. (2018). Saving more in groups: Field experimental evidence from Chile. Journal of Development Economics, 133, 275-294. DOI:

Keynes, J. M. (1936). The general theory of interest, employment and money.

Khatun, M. (2018). Effect of Financial Literacy and Parental Socialization on Students Savings Behavior of Bangladesh. International Journal of Scientific and Research Publications, 8(12), 296-305. DOI:

Kudaisi, B. V. (2013). Savings and its determinants in West Africa countries. Journal of Economics and Sustainable Development, 4(18), 107-119.

Ky, S., Rugemintwari, C., & Sauviat, A. (2018). Does mobile money affect saving behaviour? Evidence from a developing country. Journal of African Economies, 27(3), 285-320. DOI:

Laible, D. J., Carlo, G., & Roesch, S. C. (2004). Pathways to self-esteem in late adolescence: The role of parent and peer attachment, empathy, and social behaviors. Journal of adolescence, 27(6), 703-716. DOI:

Lyons, A. C. (2007). Credit practices and financial education needs of Midwest college students. Networks Financial Institute Working Paper, (2007-WP). DOI:

Mahdzan, N. S., & Tabiani, S. (2013). The impact of financial literacy on individual saving: An exploratory study in the Malaysian context. Transformations in Business & Economics, 12(1), 41-55.

Mangleburg, T. F., Doney, P. M., & Bristol, T. (2004). Shopping with friends and teens’ susceptibility to peer influence. Journal of retailing, 80(2), 101-116. DOI:

Modigliani, F. (1970). The life cycle hypothesis of saving and inter-country differences in the saving ratio. Induction, growth and trade, 197-225.

Modigliani, F., & Brumberg, R. (1954). Utility analysis and the consumption function: An interpretation of cross-section data. Post-keynesian economics, 1, 338-436.

Njenga, G., Onuonga, S. M., & Sichei, M. M. (2018). Institutions’ effect on households’ savings in Kenya: A ranked ordered multinomial/conditional probit model approach. Retrieved from

Norvilitis, J. M., & MacLean, M. G. (2010). The role of parents in college students’ financial behaviors and attitudes Journal of Economic Psychology, 31(1), 55-63. DOI:

Otto, A. (2013). Saving in childhood and adolescence: Insights from developmental psychology. Economics of Education Review, 33, 8-18. DOI:

Prawitz, A., Garman, E. T., Sorhaindo, B., O'Neill, B., Kim, J., & Drentea, P. (2006). InCharge financial distress/financial wellbeing scale: Development, administration, and score interpretation. Journal of Financial Counseling and Planning, 17(1).

Romer, P. M. (1986). Increasing returns and long-run growth. Journal of Political Economy, 94(5), 1002-1037. DOI:

Sabri, M. F., & MacDonald, M. (2010). Savings behavior and financial problems among college students: The role of financial literacy in Malaysia. Cross-Cultural Communication, 6(3), 103-110.

Sam, Y., Geetha, C., & Mohidin, R. (2012). What were the factors that influence financial management behavior of undergraduates? . International Journal of Business Trends and Technology, 2(1), 2249-0183.

Shim, S., Barber, B. L., Card, N. A., Xiao, J. J., & Serido, J. (2010). Financial socialization of first-year college students: The roles of parents, work, and education. Journal of Youth and Adolescence, 39(12), 1457-1470. DOI:

Sinclair, R., & Singh, N. (2015). Savings Groups and their Role in Child Wellbeing: A Primer for Donors.

Solow, R. M. (1956). A contribution to the theory of economic growth. The quarterly journal of economics, 70(1), 65-94. DOI:

Supanantaroek, S., Lensink, R., & Hansen, N. (2017). The impact of social and financial education on savings attitudes and behavior among primary school children in Uganda. Evaluation Review, 41(6), 511-541. DOI:

Tharanika, K., & Andrew, A. (2017). Factors Influencing On Saving Behavior Among University Students. 4(14), 861-871.

Turan, G., & Gjergji, O. (2014). What is the impact of savings on growth? The case of a small open economy (Albania). Mediterranean Journal of Social Sciences, 5(13). DOI:

Webley, P., & Nyhus, E. K. (2006). Parents’ influence on children’s future orientation and saving. Journal of Economic Psychology, 27(1), 140-164. DOI:

World Bank. (2017). End Extreme Poverty: Boost Shared Prosperity. Retrieved from Washington, D.C.:

Zaihan, N. D. (2016). Determinants of saving behavior among generation Y students in Universiti Utara Malaysia. (PhD), Universiti Utara Malaysia.