Abstract:
Saving located within economic psychology plays an important role in individual,
household and country’s development. As saving decisions areinfluenced by
attitudinal factors, this study attempts to identify them by applying a factor analysis
because of the latentnature of saving. Based on stratified random sampling method
500 households were selected from 5 job groups from all DS divisions of the
Jaffna district. Questionnaire with 21 Likert type questionswas used to collect
data under a survey method. Six factors emerged out of the factor analysis and
accounted for 52% of variance. ‘need for saving’ and ‘competency in finance’
‘formal sector saving habit’,‘debt avoidance’ correlated positively and significantly
with saving. Households which understand the need for saving, who are competent
in financial matters, have a habit of formal sector saving, and wish to avoid debt
have a positive attitude towards saving. Therefore, results of this study propose
that policy measures which aim to enhance household saving should consider
about these attitudinal factors when developing saving instruments. It might be
beneficial to identify individual differences in attitude as it helps the proposed
development framework for the Northern Province as saving is indispensable for
accumulation of investment.
