Socio-Demographic Impacts on the Personal Savings Portfolio Choice: A Decision Tree Approach

Insufficiently-developed financial systems, poor standards of living, and inappropriate education of citizens on the saving products lead to low levels of investment in the financial markets of developing countries. In this paper, special attention is paid to examining the socio-demographic profile of Montenegrin citizens who invest their funds in some of the offered forms of savings, as well as examining main factors that restrict their investment. For this purpose, data collected through the survey of Montenegrin citizens were processed using decision tree method. Survey results have shown that there is a low level of savings, as well as that citizens prefer deposits and life insurance products rather than pension plans and debt securities. Also, the results indicate that the main causes of the current state of savings in Montenegro are low standard of living, citizens' poor awareness, and the financial system, which causes the insufficiently attractive supply of savings.