Household financial behavior

Dirk Brounen, Kees Koedijk, Rachel Pownall

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Greater personal responsibility toward financial decision-making is being advocated on a global basis. Individuals and households are encouraged to take a more active approach to personal finance. In this paper, we examine behavioral factors, which lead households toward savings and financial planning across a panel of 1253 Dutch households. In line with the available literature, we find that an individual's propensity to save decreases with age and is higher among the financial literate. Moreover, we find that saving behavior varies across generations, and is significantly dominant among baby boomers. This generation effect, however, weakens once we account for more individual specifics. Our results offer evidence for parental influence, and for the effects of the psychological and behavioral metrics of numeracy, self-efficacy, locus of control and future orientation. A good understanding of these personality variables helps to explain why some take financial responsibility while others do not.
LanguageEnglish
Pages95-107
JournalJournal of International Money and Finance
Volume69
DOIs
StatePublished - Dec 2016

Fingerprint

Household
Financial behavior
Baby boomers
Financial decision making
Future orientation
Personal responsibility
Personal finance
Psychological
Saving behavior
Self-efficacy
Numeracy
Financial planning
Factors
Responsibility
Propensity
Savings
Locus of control

Keywords

  • household finance
  • financial literacy
  • personality

Cite this

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title = "Household financial behavior",
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Household financial behavior. / Brounen, Dirk; Koedijk, Kees; Pownall, Rachel.

In: Journal of International Money and Finance, Vol. 69, 12.2016, p. 95-107.

Research output: Contribution to journalArticleScientificpeer-review

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