What Determines Household’s Financial Behavior? A Case of Punjab, Pakistan

Abstract

The purpose of this paper is to answer, what determines financial behavior of Pakistani Households? Considering the interpretivism as epistemological considerations, subjectivism as ontological considerations, and induction as research approach, this study employs the qualitative research methods. 38 semi structured interviews are conducted. The results suggest that financial planning of households in Pakistan is determined by demographic and macroeconomic factors. Intentions, society and culture influence household spending, and the special purpose and availability of savings determine their savings behavior. The literature is inconclusive regarding the determinants of household financial behavior, primarily because of differences in culture. This emphasizes the importance of separately studying household financial behavior in settings of Pakistan. The originality lies in exploring the factors in determining Pakistani households' financial behavior.