ECO 3022 NMU Tracking South Africa’s Savings Culture Essay
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Complete the requirements from 1 to 7. Create a table using excel in number 5.
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Faculty of Business & Economic Sciences
Department of Economics
Diploma in Economics
ECO3022 ASSIGNMENT
DUE DATE: 8 OCTOBER 2021
TRACKING SOUTH AFRICA’S SAVINGS CULTURE
South Africa has one of the worst savings rates in the world, but this poor savings culture is
not only a problem at household level, it is symptomatic of a deeper issue.
Speaking at the launch of the Investec GIBS Savings Index, René Grobler, Head of Investec
Cash Investments, noted: The only significant contributor of savings in South Africa over the
past few decades has actually been the corporates in South Africa. Both government and
household spending is poor, notes the Index, with poor household saving also impacting on the
ability of individuals to start their own businesses. After all, noted Grobler: Corporates are
often born out of household savings, so these two go hand in hand.
http://www.mba.co.za/infocentrearticle.aspx?s=48&c=3&a=6149&p=3
From the article above, René Grobler, Head of Investec Cash Investments has noted that there is
a poor household saving culture in South Africa. In order to have more insights on household
savings behaviour in South Africa, you are tasked to an econometric analysis with the title,
DETERMINANTS OF HOUSEHOLD SAVINGS IN SOUTH AFRICA.
NB: FOLLOW THE ASSIGNMENT REQUIREMENT AND GUIDELINES AS
PROVIDED
Assignment Requirements
1. Introduction
Explaining what the research seek to address in one paragraph
2. Providing an overview of determinants of household savings in South Africa
Trend and comparative analysis analyse and interpret trendsdeterminants
NB Measurement of variables discuss how you will measure each of the
variables, and how you interpret the values (e.g. percentages changes, rand
values, proportions)justifying why such measurements are use
NB- Links where you can access data to construct your trends are listed on
appendix
3. Empirical Literature
Studies done by other scholars on determinants of household savings in South
Africa as well as other countries). Each study should have the author, country in
which the study was done and a discussion of the results. (One empirical study
should be in one paragraph, the paragraph should not exceed 8 lines). You need to
come up with at least 5 empirical studies,
Use books and journals but not Wikipedia, Investopedia, Economics Help,
Economics Tutor
NB: You basically discuss the relationship between explanatory variables and
the dependent variable as well as the theoretical framework justifying the
relationship
4. Modelling
Discussion of the Ordinary Least Squares (OLS)
Also develop a model that will be used (Econometric model) stating which
variable is dependent (y) and which ones independent (x)
Establishing prior expectations between each explanatory variable and
household savings
NB:
Use the variables in the appendix Eviews Output the create your
Econometric Model
5. Interpretations of the results (provided)
Interpret the Descriptive Statistics
Evaluate this result with respect to its economic meaning, overall fit, and the
signs and significance of the individual coefficients.
An evaluation if the results are in line with prior expectations and economic
theory.
Comment on overall robustness of the model using the provided data
Present the data you are going be be discussing in table form as in table
Dependent variable: Household savings
Variable
Coefficient
Standard error
t-statistic
p-value
6. Provide a conclusion and recommendations.
Practical meaning of the results/findings
7. List of sources/Reference List
Journal Articles Names of the authors, title of the paper, Journal name (in italics),
volume, issue number in brackets and page numbers
Ang, J. B. & McKibbin, W.J. 2007. Financial Liberalisation, Financial Sector Development
and Growth: Evidence from Malaysia. Journal of Development Economics, 84(1), 215-233
Books Names of authors, title of the book (in italics), place where the book is published
and publisher
Spratt, S. 2009. Development Finance: Debates, Dogmas and New Directions. London:
Routledge.
Internet sources Names of the authors, title of the articles, Link.
World
Bank,
2014.
World
Development
Indicators.
[Online]
Available:
http://data.worldbank.org.
Assignment Specifications
Maximum length of 8 pages (excluding referencing, cover page, appendix and table of
contents), not more than 4 500 words
Use Font: Times New Romans, Font Size: 12, Spacing: 1.5 and use Harvard or APA when
referencing but be consistent with the one you have decided to choose.
Similarity Index should be 20% and below
Marking guide
Category
Total Mark
Introduction
5
Background of study
15
Empirical literature
10
Modelling
10
Data analysis
50
Grammar and spellings
5
Referencing
5
Total
100
Score
EVIEWS OUTPUT
Real interest
rates
Mean
Median
Maximum
Minimum
Std. Dev.
Skewness
Kurtosis
Household debt GDP per
Capita
Household size
3.189447
3.786464
12.99292
-12.31500
4.656122
-0.860025
5.021244
9.069618
8.680426
18.65493
-0.692030
4.380319
0.169584
2.199068
2.946154
3.037937
13.96058
-6.765615
3.695403
0.032736
4.440234
3.521343
4.219759
21.90906
-17.65994
10.26266
-0.313916
2.514788
Jarque-Bera
Probability
14.38150
0.000754
1.544574
0.461955
4.070515
0.130647
1.285439
0.5250860
Sum
Sum Sq.Dev.
Obs
156.2829
1040.615
41
444.4113
920.9855
41
138.4692
628.1761
41
172.5458
5055.467
41
Dependent Variable: HOUSEHOLD SAVINGS
Method: Least Squares
Date: 20/08/2021 Time: 12:35
Sample: 1980 2020
Included observations: 41
Variable
Coefficient
Std. Error
t-Statistic
Prob.
Household Size
Household Debt
GDP Per Capita
Real interest rates
C
-10.90408
-12.54785
6.746364
5.545464
18456.6
0.997095
10.444524
2.574656
0.454564
18783.27
-10.93584
1.203340
2.620044
12.199768
9.804290
0.0000
0.0465
0.0784
0.0984
0.0000
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
F-statistic
Prob(F-statistic)
0.754087
0.747782
119621.3
5.58E+11
-536.5268
119.5927
0.000000
Mean dependent var
S.D. dependent var
Akaike info criterion
Schwarz criterion
Hannan-Quinn criter.
Durbin-Watson stat
205487.9
238188.2
26.26960
26.35319
26.30004
1.644788
LINKS TO DATA SOURCES IN SOUTH AFRICA
Statistics South Africa: http://www.statssa.gov.za/publications/publicationsearch.asp
Examples of data available; Motor Trade Industry Reports, Retail Trade Sales, Consumer
Price Index, Producer Price Index, Etc
Reserve Bank of South Africa: http://www.reservebank.co.za/
[Macroeconomic and financial data such as, interest rates prime rate and repo rate,
exchange rates, loans and advances from the banking industry, etc.
Department of Trade and Industry: http://www.thedti.gov.za/econdb/default.asp
[Link to an extensive list of sources]
Absa Bank: http://www.absa.co.za/absacoza/content.jsp?/Home/News-&-Market
Information/Absa-Publications/Economic-Research
[Property research data]
World Bank: http://data.worldbank.org
International Monetary Fund (IMF): http://www.imf.org
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attachment
Tags:
labor trends
economic
performance
household savings
savings habits
South African
households
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