The Influence of Personality Traits on Private Retirement Savings in Germany

Schäfer, Konrad C.

doi:10.2139/ssrn.2839772

Cited by 7 publications

(7 citation statements)

References 33 publications

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“…Their main findings are that conscientiousness is positively correlated with participation in a pension plan and extraversion negatively. Schäfer (2016) investigate what influence personality traits have on retirement saving patterns in Germany. And Wicks and Nelson (1967) conduct a small sample study in the 1960s among college students in the US finding that there are significant differences in temperament if participants were grouped according to their MPCs.…”

Section: Relevance Of Big Five Personality Traits For Policy Makingmentioning

confidence: 99%

Personality-Augmented MPC Linking Survey and Transaction Data to Explain MPC Heterogeneity by Big Five Personality Traits

Nemeczek

Radermacher

2022

SSRN Journal

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Section: Relevance Of Big Five Personality Traits For Policy Makingmentioning

confidence: 99%

Personality-Augmented MPC Linking Survey and Transaction Data to Explain MPC Heterogeneity by Big Five Personality Traits

Nemeczek

Radermacher

2022

SSRN Journal

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“…They posit that investors invest wisely in diversified portfolios to maximize return and minimize risk, not according to their personalities. (Schäfer, 2016) analyses the retirement savings of German individuals and how they are affected by these individual's personality traits. The study has revealed extraversion has a significant positive impact on retirement savings, whereas agreeableness has a significant negative impact on such savings.…”

Section: IImentioning

confidence: 99%

Does Your Personality Affect the Investment Risk You Take?

Poddar¹,

Adhikari²

2022

NMMR

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Purpose: This paper considers personality, one not so extensively researched factor affecting investment decisions. It understands how personality traits affect an individual’s investment risk profile, and also how demographics affect this risk and personality. Methodology: For this purpose, a survey is conducted in Kolkata and Ranchi, with a total of 119 respondents. Investors’ personality is analyzed through Big Five Personality Trait Model. Risk Profile of investors is measured using Likert scale questions. Correlation, ANOVA or Chi Square tests are used to find relations between personality traits, risk taken and demographics. Findings: This study found positive correlations between Openness to Experience and Neuroticism with Investor Risk. It found significant relations between Gender and Risk Taken. Neuroticism & Gender, Extroversion & Employment, and Extroversion & Income were also found to be significantly related. Practical Implications: Understanding the financial personality helps in finding the reason behind an individual’s investment decision making, and how that individual is going to react to factors involved in investing. Originality/Value: Even though personality characteristics are important aspect, only recently have economists began analyzing their effect on financial decisions. This study will concentrates on this area, and explains how personality of the investor affects his/her risk perception.

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“…Indeed, an internal locus of control has been shown to be strongly associated with higher levels of financial capability (Shephard et al, 2017), greater satisfaction with one's household financial circumstances (Sumarwan and Hira, 1993), more rational financial decisionmaking (Plunkett and Buehner, 2007), more purposeful shopping habits in Canadian students (Busseri et al, 1998), and higher rates of saving (Cobb-Clark, 2015;Cobb-Clark et al, 2016). For example, households with one respondent who believes that he or she can generally control their own life outcomes save more overall and as a percentage of their income (Cobb-Clark et al, 2016) and are more likely to save (and save more) for their retirement (Schäfer and Konrad, 2016). Thus, income volatility might lead to worse financial outcomes in part because the unreliable shifts in income reduce people's belief in their own agency and reduce their sense of internal locus of control.…”

Section: Psychological Consequences Of Income Volatility: Locus Of Controlmentioning

confidence: 99%

The Role of Income Volatility and Perceived Locus of Control in Financial Planning Decisions

2021

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Two studies examine whether income volatility might lead to greater personal financial insecurity and might create a decision environment that discourages planning ahead on personal finances. In Study 1 (N = 982), participants who reported more month-to-month variability in their actual income were less likely to have planned for financial contingencies. A lower internal locus of control partially mediated the link between volatility and financial planning decisions in Study 1, and lower internal locus of economic control predicted financial planning decisions independently of volatility. In Study 2 (N = 149), participants who were randomly assigned to receive volatile (vs. stable) payments in a simulated work environment were less likely to save their compensation for this work. Again, lower internal locus of economic control predicted financial planning decisions independently of volatility. This is the first study to demonstrate a causal link between income volatility and financial decisions, specifically a heightened tendency to make short-term financial decisions. Both studies also underlined the importance of internal locus of control for financial planning decisions.

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The Influence of Personality Traits on Private Retirement Savings in Germany

Cited by 7 publications

References 33 publications

Personality-Augmented MPC Linking Survey and Transaction Data to Explain MPC Heterogeneity by Big Five Personality Traits

Personality-Augmented MPC Linking Survey and Transaction Data to Explain MPC Heterogeneity by Big Five Personality Traits

Does Your Personality Affect the Investment Risk You Take?

The Role of Income Volatility and Perceived Locus of Control in Financial Planning Decisions

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