THE INTERNET MIRACLE: THE IMPACT OF INTERNET ACCESS ON HOUSEHOLD SAVING IN INDONESIA
Abstract
This study analyzes the impact of access to the internet and household saving behavior, in the context of the amount of savings and the saving preferences, in Indonesia. Using the fifth wave of the Indonesia Family Life Survey data, this study finds that there is a positive effect between internet access and household savings. This access includes private internet access and public internet access. Nonetheless, the effect of private internet access differs from public internet access. Private internet access positively impacts both the amount of savings and the saving preferences, whilst public internet access only increases the amount saved, not the saving preferences.
Downloads
References
Adema, Y., & Pozzi, L. (2015). Business cycle fluctuations and household saving in OECD countries: A panel data analysis. European Economic Review, 79, 214-233.
Allen, F., Demirgüç‐Kunt, A., Klapper, L. & Peria, M. S. M. (2016). The foundations of financial inclusion: understanding ownership and use of formal accounts. Journal of Financial Intermediation, 27, 1-30.
Athukorala, P. C., & Tsai, P. L. (2003). Determinants of household saving in Taiwan: Growth, demography and public policy. The Journal of Development Studies, 39(5), 65-88.
Banu, I. M. (2013). The impact of credit on economic growth in the global crisis context. Procedia Economics and Finance, 6, 25-30.
Bebczuk, R. N., Gasparini, L., Garbero, M. N., & Amendolaggine, J. (2015). Understanding the determinants of household saving: micro evidence for Latin America. Documentos de Trabajo del CEDLAS.
Beck, T., Demirgüç‐Kunt, A. & Peria, M. S. M. (2008). Banking services for everyone? Barriers to bank access and use around the world. World Bank Economic Review 22(3): 397-430.
Beck, T., Pamuk, H., Ramrattan, R., & Uras, B. (2015). Mobile Money, Trade Credit, and Economic Development: Theory and Evidence. Discussion Paper, 2015-023.
Becker, G (2017). Does fintech affect household saving behavior? Findings from a natural field experiment. Working Paper.
Beckmann, E., & Mare, D. S. (2017). Formal and informal household savings: how does trust in financial institutions influence the choice of saving instruments? Available at SSRN 3023711.
Bongomin, G. O. C., Ntayi, J. M., Munene, J. C., &Malinga, C. A. (2018). Mobile money and financial inclusion in sub-Saharan Africa: the moderating role of social networks. Journal of African Business, 19(3), 361-384.
Bonham, C., & Wiemer, C. (2013). Chinese saving dynamics: the impact of GDP growth and the dependent share. Oxford Economic Papers, 65(1), 173-196.
Braun, R. A., Ikeda, D., & Joines, D. H. (2009). The saving rate in Japan: Why it has fallen and why it will remain low. International Economic Review, 50(1), 291-321.
Calderón, C., & Liu, L. (2003). The direction of causality between financial development and economic growth. Journal of Development Economics, 72(1), 321-334.
Cameron, A. C., & Miller, D. L. (2015). A practitioner’s guide to cluster-robust inference. Journal of Human Resources, 50(2), 317-372.
Choi, H., Lugauer, S., & Mark, N. C. (2017). Precautionary saving of Chinese and US households. Journal of Money, Credit and Banking, 49(4), 635-661.
Cohn, R. A., & Kolluri, B. R. (2003). Determinants of household saving in the G-7 countries: recent evidence. Applied Economics, 35(10), 1199-1208.
Curtis, C. C., Lugauer, S., & Mark, N. C. (2017). Demographics and aggregate household saving in Japan, China, and India. Journal of Macroeconomics, 51, 175-191.
Demirguc-Kunt, A., Klapper, L., Singer, D., & Van Oudheusden, P. (2015). The global findex database 2014: Measuring financial inclusion around the world. The World Bank.
Demirguc-Kunt, A., Klapper, L., Singer, D., Ansar, S., & Hess, J. (2018). The Global Findex Database 2017: Measuring financial inclusion and the fintech revolution. The World Bank.
Deuflhard, F., Georgarakos, D., & Inderst, R. (2019). Financial literacy and savings account returns. Journal of the European Economic Association, 17(1), 131-164.
Domar, E. D. (1946). Capital expansion, rate of growth, and employment. Econometrica, Journal of the Econometric Society, 137-147.
Domar, E. D. (1947). Expansion and employment. The American Economic Review, 37(1), 34-55.
Evans, O. (2018). Connecting the poor: the internet, mobile phones and financial inclusion in Africa. Digital Policy, Regulation and Governance, 20(6), 568-581.
Finlay, R., & Price, F. (2015). Household saving in Australia. The BE Journal of Macroeconomics, 15(2), 677-704.
Fisher, P. J., & Hsu, C. (2012). Differences in household saving between non-Hispanic white and Hispanic households. Hispanic Journal of Behavioral Sciences, 34(1), 137-159.
Freestone, O., Gaudry, D., Obeyesekere, A., & Sedgwick, M. (2011). The rise in household saving and its implications for the Australian economy. Economic Round-up, (2), 61.
Fulford, S. L. (2015). The surprisingly low importance of income uncertainty for precaution. European Economic Review, 79, 151-171.
Giavazzi, F., & McMahon, M. (2012). Policy uncertainty and household savings. Review of Economics and Statistics, 94(2), 517-531.
Grigoli, F., Herman, A., & Schmidt-Hebbel, K. (2018). Saving in the world. World Development, 104, 257-270.
Guin, B. (2017). Culture and household saving. ECB Working Paper 2069.
Harris, M. N., Loundes, J., & Webster, E. (2002). Determinants of household saving in Australia. Economic Record, 78(241), 207-223.
Harrod, R. F. (1939). An essay in dynamic theory. The economic journal, 49(193), 14-33.
Hatzinikolaou, D., & Tsoka, A. (2016). Modeling and Estimating the Effects of Institutional Variables on a Pay-as-you-go Social Security System and on Household Saving. Public Finance Review, 44(5), 589-609.
Heckman, S. J., & Hanna, S. D. (2015). Individual and institutional factors related to low-income household saving behavior. Journal of Financial Counseling and Planning, 26(2), 187-199.
Horioka, C. Y., & Watanabe, W. (1997). Why do people save? A micro‐analysis of motives for household saving in Japan. The Economic Journal, 107(442), 537-552.
Hua, T. X., & Erreygers, G. (2019). Applying quantile regression to determine the effects of household characteristics on household saving rates in Vietnam. Journal of Asian Business and Economic Studies.
Jongwanich, J. (2010). The determinants of household and private saving in Thailand. Applied Economics, 42(8), 965-976.
Karp, N., & Nash-Stacey, B. (2015). Technology, Opportunity & Access: Understanding Financial Inclusion in the US. BBVA Research paper, (15/25).
Kazarosian, M. (1997). Precautionary savings—a panel study. Review of Economics and Statistics, 79(2), 241-247.
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.
Le Blanc, J., Porpiglia, A., Teppa, F., Zhu, J., & Ziegelmeyer, M. (2016). Household saving behavior in the euro area. International Journal of Central Banking, 12(2), 15-69.
Lenka, S. K., & Barik, R. (2018). Has expansion of mobile phone and internet use spurred financial inclusion in the SAARC countries? Financial Innovation, 4(1), 5.
Lugauer, S., Ni, J., & Yin, Z. (2019). Chinese household saving and dependent children: Theory and evidence. China Economic Review, 57, 101091.
McKinsey Global Institute (2016). Digital finance for all: Powering inclusive growth in emerging economies. McKinsey & Company
Mody, A., Ohnsorge, F., & Sandri, D. (2012). Precautionary savings in the great recession. IMF Economic Review, 60(1), 114-138.
Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18(4), 329-340.
Samantaraya, A., & Patra, S. K. (2014). Determinants of household savings in India: An empirical analysis using ARDL approach. Economics Research International, 2014.
Sassi, S., & Goaied, M. (2013). Financial development, ICT diffusion and economic growth: Lessons from MENA region. Telecommunications Policy, 37(4-5), 252-261.
Setiawan, S. (2015). Financial depth and financial access in indonesia. Journal of Indonesian Economy & Business, 30(2).
Silva, I. D. (2012). Evaluating the impact of microfinance on savings and income in Sri Lanka: Quasi-experimental approach using propensity score matching. Margin: The Journal of Applied Economic Research, 6(1), 47-74.
Solow, R. M. (1956). A contribution to the theory of economic growth. The quarterly journal of economics, 70(1), 65-94.
Steinert, J. I., Zenker, J., Filipiak, U., Movsisyan, A., Cluver, L. D., & Shenderovich, Y. (2018). Do saving promotion interventions increase household savings, consumption, and investments in Sub-Saharan Africa? A systematic review and meta-analysis. World Development, 104, 238-256.
Strauss, J., Witoelar, F., & Sikoki, B. (2016). The fifth wave of the Indonesia Family Life Survey (IFLS5): Overview and field report. RAND, Santa Monica.
Ummah, B. B., Nuryartono, N., & Anggraeni, L. (2018). Analisisinklusikeuangan dan pemerataanpendapatan di Indonesia. JurnalEkonomi dan Kebijakan Pembangunan, 4(1), 1-27.
Zhuk, M. (2015). Macroeconomic determinants of household savings in Ukraine. Economics and Sociology, 8(3), 41-54.
Copyright (c) 2021 Buletin Ekonomi Moneter dan Perbankan
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Buletin Ekonomi Moneter dan Perbankan / Bulletin of Monetary Economics and Banking is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
