Present Bias and Financial Behavior

Xiao, Jing Jian; Porto, Nilton

doi:10.2139/ssrn.3257093

Cited by 8 publications

(12 citation statements)

References 21 publications

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“…This has been demonstrated by Meier and Sprenger (2010) regarding credit card debt, while Brown and Previtero (2015) showed that present‐biased individuals were less likely to annuitize in defined benefit pension plans. Xiao and Porto (2019) examined the relationship between present bias and expenditure patterns in China and concluded that the present biased tended to spend more impatiently. In line with this literature, our analysis also elicits respondents' impatience levels and relates it to their vulnerability to financial shocks.…”

Section: Prior Literaturementioning

confidence: 99%

Americans' financial resilience during the pandemic

Clark

Mitchell

2022

Fin Plan Rev

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How household wellbeing responds to pandemic-induced financial shocks likely depends on whether people undertake certain actions that enhance their ability to withstand adverse economic events, along with their ability to efficiently respond to the shocks when they occur. This paper examines Americans' financial robustness during the Covid-19 pandemic, using an index of financial resilience and a measure of financial fragility derived from household surveys of persons age 45-75 in spring of 2020, and in May-June 2021. We estimate the factors associated with resilience and fragility in both years, show how these two measures changed a year into the pandemic, and consider whether resilience in 2020 led to better outcomes in 2021. We conclude that higher initial levels of resilience were, in fact, associated with lower levels of financial fragility a year into the pandemic. These findings suggest that policies and programs that enhance financial resilience can help low and moderate-income households withstand economic shocks and be able to better address unexpected income needs.

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Section: Prior Literaturementioning

confidence: 99%

Americans' financial resilience during the pandemic

Clark

Mitchell

2022

Fin Plan Rev

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“…PFMB can differ between population sub-groups according to marital status, income, occupation, gender, education and family structure (Perry and Morris, 2005;Grable et al, 2009;Loke 2017a;Sachitra et al, 2019;Bapat, 2020). In comparison to the work done on demographics and socio-economic factors, research on psychological factors underlying personal financial planning behavior is in an elementary stage (Joo and Grable, 2004;Xiao and Porto, 2019). Based on the existing body of literature, various psychological factors have been accounted for.…”

Section: Antecedents Of Pfmbmentioning

confidence: 99%

Antecedents and consequences of Personal Financial Management Behavior: a systematic literature review and future research agenda

Goyal

Kumar

Xiao

2021

IJBM

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PurposeThe purpose of this paper is to investigate the current state of research on Personal Financial Management Behavior (PFMB), with a prime focus on its antecedents and the consequences. By analyzing the research trends, methods, determinants and outcomes, the PFMB literature is synthesized, and agenda for future research is suggested. A framework is presented that portrays PFMB's antecedents and consequences and further specification of the mediation and moderation linkages.Design/methodology/approachThe review is based on 160 articles published during 1970–2020. It follows a systematic approach and presents the definitions and theories of PFMB, publication trends based on time, region, sample population, research designs, data collection and analysis techniques, along with antecedents and outcomes through content analysis.FindingsThe synthesis draws upon various factors affecting PFMB, such as demographics, socio-economic, psychological, social, cultural, financial experience, financial literacy (FL) and technological factors. The prominent outcomes of PFMB include financial satisfaction, relationship satisfaction, quality of life, financial success, happiness, financial vulnerability/resilience and financial well-being. The future research agenda sums up the recommendations in the form of research questions on variables and their linkages, followed by methodological advancements.Originality/valueThis paper covers the scholarly work done in this area in the past 51 years. To the best of authors' knowledge, this is the first attempt to offer a most comprehensive and collective scholarship of this subject. It further gives an extensive future research agenda.

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“…This pilot questionnaire has a validity score of 0.86 and a reliability score of 0.77. Financial management behavior is measured in four aspects, including spending, borrowing, saving, and money management [18]. Variables were evaluated on a 5-point scale to determine their impact on behavior.…”

Section: Methodsmentioning

confidence: 99%

“…The trait of seeking current pleasure at the cost of future rewards is known as present bias. It is defined as overvaluing current advantages at the expense of future returns [18]. Those who are more present-biased are more prone to consuming rather than saving and investing their money in terms of current and future expenditures.…”

Section: Present Bias Nudges and Financial Knowledgementioning

confidence: 99%

Transforming Public Higher Education through Financial Behavioral Drivers Models

Dhewi

Hadiwidjaja²

2022

AJEBA

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The purpose of this research is to investigate the correlation and causation of theories of planned behavior, present bias, iNcentives, Understanding mappings, Defaults, Giving feedback, Expecting error, and Structuring complex choices (NUDGES), and financial literacy for the university financial staff. This research investigates the staff's behaviors and outcomes and observes any changes over time. We make use of a survey questionnaire as well as data acquired from 285 financial staff at 28 public universities. The authors developed the warp partial least squares structural equation modeling (PLS-SEM) technique, which was used to analyze the data and test the proposed model. The results of this study indicate that financial management behavioral intention can be controlled by various psychological variables such as the theory of planned behavior, present bias, financial literacy, and NUDGES as the strongest predictor. The research findings underscore the importance of the system strength factor (shown by NUDGES) in monitoring and shaping financial management behavior. This research contributes to the current literature by investigating the relationship between financial management behavior intention and the theory of planned behavior, present bias, NUDGES, and financial literacy. In addition, this research has become an enrichment in the conversations of stakeholders at public universities to demonstrate the findings of this study as a basis for strengthening the financial management system through the six elements of the NUDGES factor.

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Present Bias and Financial Behavior

Cited by 8 publications

References 21 publications

Americans' financial resilience during the pandemic

Americans' financial resilience during the pandemic

Antecedents and consequences of Personal Financial Management Behavior: a systematic literature review and future research agenda

Transforming Public Higher Education through Financial Behavioral Drivers Models

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