ACKNOWLEDGEMENT

Alhamdulillah, all praises to Allah S.W.T because without His will, this project paper might not even come to getting completed. My greatest appreciation to my mother, Riwawaty binti Jamil, my beloved brothers and sisters, Irwan, Herlina, Muhammad Faizal, Marzita and to all my family members who have been supporting me all the way through my learning years of completing my study.

Next, I would like to extend my deepest gratitude especially to my advisor, Miss Jamilah binti Laidin and to my second examiner, Madam Aw Yang Huey for their guidance and invaluable help throughout their supervision of my thesis. Not to forget to all lecturers from Faculty of Business Management, UiTM Perak, for their great teaching and giving me better understanding about economic.

I also would like to express my appreciation to my special friend Muhammad Nikwan bin Rusli, my housemates, Yusma Nazira binti Mohd Yusuf, Nur Aini Binti Nyan, Mufizah binti Stapah @ Salleh and Rabiatul Adawiyyah binti Samsukamal and to all my classmate from group BE06.

Last but not least, special thanks to all private banks which give permission to distributed questionnaire. Their permission helps me to get the information needed.

Thank you very much.

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TABLE OF CONTENTS ACKNOWLEDGEMENT TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES LIST OF ABBREVIATIONS LIST OF DEFINITIONS OF TERMS ABSTRACT CHAPTERS

PAGE iv v vii viii ix x xi

1.

INTRODUCTION 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.10 Overview of Study Research problem Research Questions Research Objectives Scope of Study Significance of Study Chi-Square and Regression Hypothesis Limitation of Study Definition of Term

1 1 3 6 6 8 8 9 11 12 14 14 22 22 23 23 24 24 24 25 25 25 26 26 27 27 27 27 28 28 28

2.

LITERATURE REVIEW 2.1 Introduction

3.

RESEARCH METHODOLOGY 3.1 3.2 3.3 3.4 Research Design Research Framework Conceptual Framework Sampling Design 3.4.1 Target Population 3.4.2 Sampling Frame 3.4.3 Sampling Method 3.4.4 Sampling Size Measurement and Scaling Data Collection 3.6.1 Questionnaire Design 3.6.2 Pilot Test Data Preparation and Processing Data Analysis 3.8.1 Cronbachs Alpha 3.8.2 Coefficient of Determination 3.8.3 Chi-Square Test (Goodness of Fit) 3.8.4 Multiple Regression Analysis v

3.5 3.6

3.7 3.8

3.8.5 3.8.6 3.8.7 4.

Multicollinearity Autocorrelation Heteroskedasticity

29 29 30 31 31 31 33 37 39 40 41 42 43 44

ANALYSIS AND INTERPRETATION OF DATA 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 Questionnaire Distributed, Returned, and Completed Reliability Test Frequency of Demographic Variables Chi-Square Result Normality Test Linearity Test Multicollinearity Autocorrelation Heteroskedasticity The Finding Results for Multiple Regression and Weighted Least Squares

5.

CONCLUSION AND RECOMMENDATION 5.1 5.2 5.3 Conclusion Recommendation Recommendation for Future Research

47 47 49 51

BIBLIOGRAPHY APPENDICES APPENDIX I Cover letter APPENDIX II Questionnaire APPENDIX III SPSS Output

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LIST OF TABLES

TABLE 4.1

NAME The number of questionnaire distributed, rejected and completed Result for the reliability test for independent variable Chi-square test: Education and saving behaviour Chi-Square test: Income and saving behavior Chi-square test: Age and saving behaviour Chi-square test: Marital status and saving behaviour Chi-square test: Financial Literacy and saving behaviour Collinearity Statistics The different result between OLS and WLS

PAGE 31

4.2 4.4.1 4.4.2 4.4.3 4.4.4 4.4.5 4.7 4.10

32 37 37 38 38 38 41 44

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LIST OF FIGURES

FIGURE 1.1

NAME Number of bankruptcy case registered in first quarter of year 2009 and 2010 Gross national savings and savings investment gap Gender Ethnic Age Education Level Income Level Marital Status Number of Household Histogram Scatter Plot

PAGE 3

1.2 4.3.1 4.3.2 4.3.3 4.3.4 4.3.5 4.3.6 4.3.7 4.5 4.6

4 33 33 34 34 35 35 36 39 40

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LIST OF ABBREVIATION

MPS MPC BNM GNS EPF OLS SPSS VIF H0 H1 R2 PMR SPM STAM STPM PhD ASB MSR MSE WLS

Marginal Proprensity to Save Marginal Propensity to Consume Bank Negara Malaysia Gross National Saving Employees Provident Fund Ordinary Least Square Statistical Packages for Social Science (SPSS) Variance Inflation Factors Null hypothesis Alternative hypothesis Coefficient of Determination Penilaian Menengah Rendah Sijil Pelajaran Malaysia Sijil Tinggi Agama Malaysia Sijil Tinggi Pelajaran Malaysia Doctor of Philosophy Amanah Saham Bumiputera Regression Mean Square Residual Mean Square Weighted Least Squares

ix

LIST OF DEFINITION OF TERM

NO. 1. 2. 3. 4. 5. 6. Saving behaviour Education Income Age Marital Status Financial Literacy

NAME

PAGE 12 12 12 13 13 13

ABSTRACT

The purposes of this study were to identify the relationship of saving behaviour to education level, income, age, marital status and financial literacy. The data were obtained from primary sources through the distribution of questionnaire to 120 respondents which was only focus on seven private banks in Bukit Bintang, Kuala Lumpur. By using the Ordinary Least Square Method, all the data collected were analyzed by using window SPSS version 17.0 where multiple regression analysis was used. The result of the study indicated that education, income, marital status and financial literacy significantly influence the saving behaviour. Meanwhile, there was no significant relationship between age and saving behaviour.

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