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Personality, Risk and Financial Planning: A Consigned Credit Analysis

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  • Péricles Dias de Souza Júnior
  • Paulo Vitor Jordão da Gama Silva

Abstract

This article examines Brazilian Navy personnel's psychological and behavioral characteristics in the context of credit risk, the consigned credit, utilizing multiple linear regressions and correspondence analyses. Incorporating personality traits through the Big Five model, the research considers various sociodemographic and military characteristics. The payroll-deductible loan sample comprises individuals with high financial planning and above-average or high-risk tolerance. This research contributes novel insights by integrating personality traits as determinants of military indebtedness, financial planning, and risk tolerance. The study reveals that the personality trait "openness to experience" positively impacts financial planning, indicating a tendency toward financial discipline. Women, older individuals, and those with less service time exhibit a riskier financial profile. The research identifies a lack of basic financial knowledge among indebted military personnel, underscoring the need for interventions to address this issue. Financial planning and risk tolerance are critical factors influencing decisions, reflecting broader societal challenges of increasing indebtedness and financial illiteracy. Â JEL classification numbers: D14, G21, G32.

Suggested Citation

  • Péricles Dias de Souza Júnior & Paulo Vitor Jordão da Gama Silva, 2024. "Personality, Risk and Financial Planning: A Consigned Credit Analysis," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 14(2), pages 1-5.
    • Handle: RePEc:spt:apfiba:v:14:y:2024:i:2:f:14_2_5
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    References listed on IDEAS

    as
    1. Mahfuzur Rahman & Nurul Azma & Md. Abdul Kaium Masud & Yusof Ismail, 2020. "Determinants of Indebtedness: Influence of Behavioral and Demographic Factors," IJFS, MDPI, vol. 8(1), pages 1-14, February.
    2. Lex Borghans & Angela Lee Duckworth & James J. Heckman & Bas ter Weel, 2008. "The Economics and Psychology of Personality Traits," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    3. Daiane De Bortoli & Newton da Costa Jr. & Marco Goulart & Jéssica Campara, 2019. "Personality traits and investor profile analysis: A behavioral finance study," PLOS ONE, Public Library of Science, vol. 14(3), pages 1-18, March.
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    More about this item

    Keywords

    Credit Risk; Personality Traits; Risk-taking; Consigned Loans; Military Personnel in Brazil.;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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