Saving behavior of University students

This paper investigates the saving behavior of university students basing on the survey of randomly selected students from Universiti Brunei Darussalam. A saving model is developed based on the system of simultaneous equations which are estimated from reduced form, using the Indirect Least Squares (ILS) method. Robustness of the estimated parameters of the model is verified by the Instrumental Variable (IV) Method. It is found that the savings of students are significantly dependent on their total expenditure, other income, expenditure on special items (cars, computers, mobiles etc.) and the number of eat_outs. It also estimates the saving elasticity. Results show that students' savings increase if they have other income in addition to educational allowance; and their saving is reduced by 3% if they make 10% more total expenditure. Gender and year of study do not have any effect on students' savings. However, living at home rather than hostel students save sig-nificantly more. It demonstrates that unlike many developed countries, university students of Brunei save money irrespective of age and sex by their own initiatives without any state financial training. Most university students in Brunei save money, which is a good start for their "educational and financial security".