Micro study of low-income households in India: a poverty expectation hypothesis?

Abstract

Purpose

The purpose of this paper is to explore whether existing theories on saving behaviour and empirical findings on the determinants of saving behaviour can be generalised for the low-income households in developing countries.

Design/methodology/approach

The paper adopts Van Manen’s hermeneutic phenomenology approach. Semi-structured interviews were conducted with female household members that belong to low-income households and do not have any member of the household with a permanent job. Interviews were conducted in the cities of Bangalore and Indore in India. Lived experience of participants was captured using conversational interviews and thematic analyses.

Findings

The paper provides evidence that the existing literature on saving behaviour is inadequate in explaining either the saving behaviour or the determinants for saving for low-income households in developing countries. This paper finds evidence of poor institutional access and reliance on informal financial intermediaries for low-income households.

Research limitations/implications

This paper establishes the need for a qualitative study with a large sample size to determine the policy interventions and institutional drivers that will encourage low-income households to migrate from the informal financial intermediaries to formal banking institutions.

Originality/value

To the best of author’s knowledge, this is the first qualitative paper aimed at understanding saving behaviour of low-income households. Extant literature is focused on normative economic frameworks that bear limited relation to the contextual realities of low-income households in the developing countries.

Citation

Pandey, A. (2018), "Micro study of low-income households in India: a poverty expectation hypothesis?", Qualitative Research in Financial Markets, Vol. 10 No. 1, pp. 2-14. https://doi.org/10.1108/QRFM-12-2016-0051