Informality Behavioral Constraints and Household Financial Decisions: Evidence from Tourism-linked Livelihoods in Bharatpur Nepal

Abstract

Tourism-linked livelihoods in Nepal operate largely within informal employment systems, characterised by seasonal income and limited institutional protection. This study examines how structural informality and behavioural constraints are related to household financial decision-making among tourism-linked households in Bharatpur. This study analyses cross sectional survey data from 384 respondents and examines the combined indicators of registration status, contract availability, tax payment and use of digital payment with behavioural constraints scale identifying present bias, income uncertainty, attitudes towards risk, and trust in informal systems. To assess saving behaviour descriptive statistics, chi square tests, reliability analysis, and logistic regression were applied. Chi square results show that registration and tax payment are associated with saving and borrowing at the bivariate level. However, in the multivariate model, structural indicators are not significant predictors of regular saving. Behavioural constraints are negatively and significantly associated with saving, which shows that higher levels of present bias and perceived uncertainty reduce the likelihood of consistent saving. Use of digital payment is positively associated with saving and the overall explanatory power of the model is modest, suggesting that other socioeconomic factors also affect household decisions. The study suggests that formal employment status alone does not determine financial discipline in tourism-dependent informal economies. Behavioural factors and payment practices play a measurable role in shaping saving behaviour under seasonal income conditions.