Author: William Lee SkimmyhornPublisher:
ISBN:
Category : Financial literacy
Languages : en
Pages : 320
Book Description
Essays in Behavioral Household Finance
Author: William Lee SkimmyhornPublisher:
ISBN:
Category : Financial literacy
Languages : en
Pages : 320
Book Description
Essays on Behavioral Finance and Household Finance
Author: 洪志清Essays on Financial Education and Behavioral Household Finance
Author: Tim KaiserFinancial literacy, motivated reasoning, and gender
Author: Thérèse LindPublisher: Linköping University Electronic Press
ISBN: 9176850609
Category :
Languages : en
Pages : 27
Book Description
I wrote this thesis to create a better understanding of how individual characteristics influence our feelings, our behavior and our way of interpreting information. My focus is on financial behavior and financial information, however I also consider a political context. I investigate the (usually) enabling abilities of financial literacy and numeracy. I also consider impediments such as stereotype threat and motivated reasoning, which can prevent people from engaging in certain behaviors or from interpreting information objectively. Both processes stem from valued beliefs and psychological foundations, consequently peoples’ efforts, decisions, and evaluations are based on them. The first essay, “Competence, confidence, and gender: The role of perceived and actual financial literacy in household finance,” broadens our understanding of the benefits of financial competence. I contrast perceived and actual levels of financial literacy, and consider the role of numeracy and cognitive reflective ability. I conclude that perceived and actual levels of financial literacy positively affect behavior and wellbeing; however, perceived financial literacy more so than actual financial literacy. No such effect is observed for numeric ability and cognitive reflection. Furthermore, women are more anxious about financial matters even though they tend to engage more frequently in the considered financial behaviors. The second essay, “Threatening finance? Examining the gender gap in financial literacy,” continues my exploration of the relationship between gender and financial literacy. In a series of studies, I investigate whether the observed gender gap in financial literacy can be identified in nonnumerical contexts, if it can be associated with confidence in financial matters, and if it can be attributed to stereotype threat, which posits that inbuilt prejudices about gender and finance undermine women’s performance of tasks that involve finance. The results show that the observed gender gap in financial literacy is robust even in nonnumerical financial contexts and suggest that a stereotype threat for women in the financial domain might be present. The gender gap in financial literacy could not be attributed to a difference in (displayed) confidence. In the third essay, “Preferences for lump-sum over divided payment structures,” I investigate whether or not people display systematic preferences for lump–sum or divided payment structures and how these preferences differ in gain (benefit) and loss (payment) situations. I investigate what happens when payments belong to a single underlying event, such as when people can choose to pay immediately or in installments. I also examine whether or not individual differences in time preferences, risk preferences, numeracy, and financial literacy are associated with preferences for one payment structure or the other. The aggregate results show a tendency for people to prefer obtaining and paying money in lump sums. I find no systematic indication that the considered individual differences play a role in this type of decision. The fourth essay, “Motivated reasoning when assessing the effect of refugee intake,” inquires into differences in worldview ideology, whether people identify as nationally or globally oriented, hinder them from objectively interpreting information. I use an experiment to find out if people display motivated reasoning when interpreting numerical information about the effects of refugees on the crime rate. Our results show evidence of motivated reasoning along the lines of worldview ideology. However, individuals with higher numeric ability were less likely to engage in motivated reasoning, leading to the conclusion that motivated reasoning is more likely to be driven by feelings and emotional cues than by deliberate analytical processes.
Essays in Household Finance
Author: Bilal IslahPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
This thesis contributes to two significant recent advances in the field of household finance. The increased access to large datasets that has expanded researchers ability to test household behavior at the micro-level and the greater recognition of deviations of household behavior from the benchmark household decision making framework. The first chapter introduces the literature and ties in the two main works of this thesis. The second chapter studies the household consumption-savings problem in the context of unexpected automobile expenses. By making use of high-frequency household transaction level banking data, I document the size and frequency of large out-of-pocket automobile expenses. I estimate the consumption-smoothing costs to households and show that households that I identify as low in liquid wealth struggle to finance these expenses directly. Furthermore, I suggest that the observed consumption-smoothing response to automobile expense shocks is unlikely to be generated by the standard benchmark consumption-smoothing model without several augmentations. In particular, low liquid wealth households undersave relative to levels of risk aversion and discount rates typically assumed in the literature. As a result, low liquid wealth households fail to self-insure against an important category of household expense shocks. The third chapter introduces a framework for behavioral household decision making and demonstrates the equilibrium impacts on prices, as well as important distributional state variables such as wealth. We offer a computational and behavioral framework that studies the impact of limited household ability to predict equilibrium prices. We primarily focus on the ability of households to reconcile a long run stationary forecast of prices with the ability to forecast equilibrium prices over a short run finite horizon that is conditional on future aggregate histories (we call this foresight). We are able to offer a degree of computational tractability because of the nature of household optimization that requires only a finite horizon knowledge of equilibrium prices. In particular, we note that the degree of foresight on equilibrium prices can vastly change prices in equilibrium, especially when the degree of foresight is limited to a few periods.
Three Essays on Household Finance
Author: Alexander Calen Aberlin KaufmanPublisher:
ISBN:
Category :
Languages : en
Pages : 312
Book Description
This dissertation presents three essays on household finance. All three focus on contemporary U.S. consumer credit markets, with particular attention paid to how market organization and firm incentives mediate the way firms interact with customers and the types of contracts they offer. The first essay examines the question of whether securitization was responsible for poor underwriting standards during the recent mortgage crisis. The second essay attempts to quantify the effect of Fannie Mae and Freddie Mac's intervention in the conforming mortgage market on equilibrium outcomes such as price and contract structure. The third essay investigates how mutual ownership of a firm by its customers can limit that firm's incentive to offer contracts meant to take advantage of customers' behavioral biases.
Essays on Behavioural Economics and Household Finance
Author: Tomasz SulkaEssays in Household Finance
Author: Madelaine Reid L'EsperancePublisher:
ISBN:
Category :
Languages : en
Pages : 144
Book Description
Many US adults have difficulty managing their financial lives. Financial capability, the knowledge, skills, and access to resources to handle finances effectively, is essential to promoting financial well-being. However, the pathways to improve financial capability remain unclear. Traditional approaches, including financial education, counseling and coaching as well as safety net programs and safe, affordable financial services, are well explored by researchers. However, there are also non-traditional channels which have received less attention. In this dissertation, these approaches are examined, specifically learning by doing, learning from others, and behavioral interventions. First, the influence of repeated experiences in the financial market on financial capability is explored. Using a panel of US couples, the study reveals that relative income is a key determinant of financial responsibility in couples, and partners who defer responsibility are less likely to know their credit score. The second essay examines the effect of youth employment, an experience that may build financial capability, on financial well-being in young adulthood using several approaches to deal with selection into youth employment. Working in high school may provide youth with an opportunity to learn how to effectively manage their finances through experiences and information sharing. The analysis reveals that those who work as youth are not more financial capable in young adulthood than their counterparts who were not employed. Finally, the third essay investigates the role of reminders for encouraging consumers to attend to information about their finances. This study uses a field experiment to test whether reminding credit union members that they have access to a free credit monitoring service motivates them to check their credit score and report. Despite the promise of this low-cost approach to improving accuracy of beliefs about creditworthiness, those who receive the message are no more likely to check their credit than a control group who receives no message. Overall, these essays contribute new evidence on the potential role of non-traditional pathways to financial capability that inform the design of programs and financial services that aim to better inform consumers and improve financial well-being. A roadmap for future research is offered.
Household Finance
Author: Richard DeavesPublisher: Oxford University Press
ISBN: 0197699855
Category : Business & Economics
Languages : en
Pages : 449
Book Description
"Household Finance: An Introduction to Individual Financial Behavior is about how individuals make financial decisions, and how these financial decisions contribute to and detract from their well-being. What sort of decisions am I talking about? We all must manage our money, shifting our resources across time. Sometimes we need to consume more than is currently available to us. For example, people commonly borrow to purchase residential real estate, paying down their mortgage loans over time. At other times, we have excess funds that we can save and invest. The main reason to accumulate wealth is to amass a fund that we can draw down when older and less able and willing to earn labor income. It is crucial, then, that our savings be sufficient to ensure a comfortable retirement. It is not enough to save; our savings must be invested appropriately so as to properly counterbalance risk and return. One way is to buy low-cost mutual funds or exchange-traded funds where the job of diversification is done for us. Some of us, however, purchase not only investment funds but also individual securities that we ourselves select. If so, it is vital that we avoid preventable errors. And, along the way, since the world is unpredictable, it is appropriate to protect ourselves by insuring against the sort of catastrophic loss that can derail our best-laid financial plans"--
Author: M. Angrisani