Voluntary rural savings capacities in Taiwan, 1960-1970

Consumption function analysis showed that households saved an average of between one-fifth and one-quarter of their income during this period. Yearly marginal propensities to save ranged from one-third to two-thirds on the average over the same period. Appropriate policies rather than unique behavioral characteristics appear to explain the remarkable rural savings capacities demonstrated in this study. These policies include availability of profitable on-farm investment opportunities and significant real rates of return to financial deposits.