Relative Income and Household Saving Behavior

The purpose of this study is to see the relationship between relative income and urban household saving performance. For the purpose of this study primary data from 354 respondents is used. Descriptive statistics is used for analysis purpose. The finding of the study indicates that, most of the households’ financial situation is similar with their references. Most of the households save a little portion of their periodic income although they don't give any particular attention. !ccording to the cross tabulation result, as family's relative income becomes better than their reference, their propensity to save is will be improved. As per the result of the one way ANOVA, there is no significant mean difference among households economic situation is worse, little worse, similar, better or best. The overall Kruskal-Wallis H test result and the post hoc test among worse and better, worse and best, little worse and better, little worse and best, similar and better, and similar and best economic situation under their first most important references indicates the presence of significant differences. Likewise, there is a significant mean difference among little worse and better, little worse and best, similar and better, and similar and best economic situation relative to their reference second most important reference group but not among worse and better, and worse and best economic situation. Lastly, it is recommended that future researchers to see the impact of economic condition on saving amount using a regression analysis and by including rural households.