Behavioral Economics Influences on Saving Behavior: Developed vs. Emerging Markets

Abstract

This research explores how behavioral biases, such as loss aversion, present bias, and mental accounting, influence household saving behavior in developed markets (USA, Germany) and emerging markets (India, Kenya). Surveys and experiments across 4,000 households indicate that while biases affect savings globally, developed markets benefit from higher financial literacy and access to formal banking, mitigating negative effects. Emerging markets show reliance on informal savings and vulnerability to behavioral pitfalls, though digital financial services and nudges can improve outcomes. The study informs policymakers and financial institutions on designing culturally and economically tailored interventions to enhance savings behavior and financial security.