The impacts of emotions and personality on borrowers’ abilities to manage their debts

Rendall, Stella; Brooks, Chris; Hillenbrand, Carola

doi:10.1016/j.irfa.2021.101703

Cited by 8 publications

(8 citation statements)

References 129 publications

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“…This study provides evidence that middle-aged men, with high income and education levels, are risk-seekers. The findings of this study regarding age and marital status are in contradiction with the results obtained by Rendall et al (2021). Campara et al (2021) examined the phenomenon of FRT in terms of experiencing and remembering selves (Kahneman et al, 1997;Kahneman, 2000).…”

Section: Recent Developmentscontrasting

confidence: 99%

“…In another study, the impact of emotional personality traits and some demographic features on financial decision-making were investigated. The results show that young, unmarried people, who do not own any property take more risk by borrowing QRFM 14,1 using their credit cards, etc., to repay their debts in the case of financial difficulties (Rendall et al, 2021).…”

Section: Recent Developmentsmentioning

confidence: 99%

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A qualitative phenomenological exploration of social mood and investors’ risk tolerance in an emerging economy

Asad

Toqeer

Mahmood

2021

QRFM

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Purpose The authors design a theoretical perspective that explores how different phases of social mood influence financial risk tolerance (FRT) among investors. Risk is involved in almost all financial decision-making. For a better understanding of risk tolerance behavior, the role played by social mood cannot be ignored. This study aims to explore the linkage between social mood and FRT of investors in Pakistan. Design/methodology/approach Using qualitative phenomenology as the guiding framework, 22 interviews were conducted to have a deeper understanding of the lived experiences of investors with at least 10 years of investment experience. Thematic analysis was done to analyze data. Audio-recording, bracketing, triangulation and member checking were done to ensure validity and reliability. Findings A theoretical model is developed using the six themes identified through thematic analysis. This model presents an in-depth analysis of the determinants of social mood, its multiple phases and its impact on risk tolerance behavior. Findings reveal that the level of financial literacy, experience and purpose of investment moderate the effect of social mood on FRT. Practical implications Investors can manage risk and increase their profits by controlling the effects of social mood. They can benefit from the market situation by taking more risk when the market is extremely low. The advisors can frame their advice in the light of the model. Originality/value According to the authors’ knowledge, this is the first study that explores investors’ risk tolerance in response to variations in social mood in the context of an emerging economy. The paper has contributed conceptually and methodologically. It uses phenomenology as the method and develops a theoretical model that describes how different types of investors adjust their risk tolerance in response to changes in their social mood.

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Section: Recent Developmentscontrasting

confidence: 99%

Section: Recent Developmentsmentioning

confidence: 99%

A qualitative phenomenological exploration of social mood and investors’ risk tolerance in an emerging economy

Asad

Toqeer

Mahmood

2021

QRFM

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“…Harrison and Chudry (2011) posited that those individuals who have neuroticism personality traits could not distinguish attitude toward investment decision-making and are worried about their financial planning. Similarly, researchers argue that individuals disposing of neuroticism may not manage their funds efficiently (Linehan, 2018;Rendall et al, 2021). Olson and Weber (2004) analyzed personality traits and 16 most critical fundamental drivers, indicating that neuroticism significantly contributes to saving behavior.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Impact of personality traits on financial planning: an empirical evidence from Pakistan

Ghaffar

Khattak

Shah

et al. 2022

JEAS

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PurposeThis study examines the role of the big five personality traits: conscientiousness, openness, extroversion, neuroticism and agreeableness in financial planning.Design/methodology/approachThe research design is a quantitative approach. The study has used structured questionnaires to collect data from 403 business students. The hypotheses were tested through structural equation modeling using AMOS.FindingsThe findings revealed that extroversion of personality traits have a significant negative influence on financial planning, neuroticism and conscious personalities have a significant positive effect on financial planning. However, two personality traits, namely openness and agreeableness, have no significant influence on financial planning. The study confirmed that out of five, three personality traits have significant impact on financial planning.Research limitations/implicationsThe results suggest that all personality traits do not influence financial planning among students. Financial planning is deemed an essential decision in life. Although some people are very conscious about their future expenditures, others are not much concerned. Based on the findings, this study recommends that policymakers may conduct workshops and arrange seminars and conferences for the promotion of financial planning and individual's financial well-being. The government needs to promote financial education that can directly and indirectly enhance the saving planning capabilities of the people.Practical implicationsThe results suggest that not all personality traits facilitate financial planning. Financial planning is deemed as a crucial decision in life. Some students are very conscious about their future expenditures, while others are not much concerned. This study recommends that policymakers conduct workshops and arrange seminars and conferences to promote financial planning and individuals' financial well-being. The government of Pakistan needs to promote financial education that can, directly and indirectly, enhance the savings and planning capabilities of the students.Originality/valueThis research contributes to the personality literature, the theory of planned behavior and the life cycle theory by testing the model based on empirical evidence. The current study is the first to focus on the role of the big five personality traits in financial planning among students in Pakistan, an emerging economy.

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“…Behavioral bias is a major determinant of entrepreneurs' decisions, and it is believed to have an influence on entrepreneurs, including the youth, particularly in debt financing (Rasool & Ullah, 2020). Therefore, social beliefs and attitudes are one of the major factors of debt financing among individuals, both for business and personal ventures, particularly in mobile phone debt financing in East Africa (Malinga & Maiga, 2020;Mugambe, 2017;Rendall, Brooks, & Hillenbrand, 2021).…”

Section: Social Influencementioning

confidence: 99%

Motivators of Mobile Phone Debt Financing among College Students in Kenya

Nyamita¹

2022

theijbm

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Mobile phone debt financing is above 90% among all phone users in Kenya, irrespective of the reason for borrowing, and at least three-quarters of the youth who own mobile phones in Kenya have accessed and utilized formally acquired debt financing, including mobile phone loans. In addition, mobile phone debt financing is essential for empowering the youths by enabling them to engage in small entrepreneurship ventures and even support their education programs. Hence, the study attempted to determine the motivators of this kind of debt financing among college students in Kenya. Using a purposive sampling technique, 377 students from four major colleges and universities in Kisumu City, Kenya, with a total population of 18,700 students, were applied to obtain data. Descriptive and inferential statistics were used, and the findings revealed that government regulations and credit terms are the most significant motivators of mobile phone debt financing among college students in Kenya. Sensitization and social influence were also found to moderately influence mobile debt financing.

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The impacts of emotions and personality on borrowers’ abilities to manage their debts

Cited by 8 publications

References 129 publications

A qualitative phenomenological exploration of social mood and investors’ risk tolerance in an emerging economy

A qualitative phenomenological exploration of social mood and investors’ risk tolerance in an emerging economy

Impact of personality traits on financial planning: an empirical evidence from Pakistan

Motivators of Mobile Phone Debt Financing among College Students in Kenya

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