IDEAS home Printed from https://ideas.repec.org/a/bpj/bejeap/vcontributions.4y2005i1n11.html
   My bibliography  Save this article

Fatalistic Tendencies: An Explanation of Why People Don't Save

Author

Listed:
  • Wu Stephen

    (Hamilton College)

Abstract

This paper uses data from the 2001 Survey of Consumer Finances (SCF) and the 2000 World Values Survey (WVS) to analyze the role of fatalism in determining household savings behavior. SCF respondents who feel that luck has played an important role in their financial affairs are more likely to realize their need to save, but are less likely to actually do so. Cross-country evidence from the WVS shows that those who believe they have little freedom and control over their lives are also less likely to save. The results hold after controlling for a number of demographic and behavioral factors, and are consistent across income and wealth levels.

Suggested Citation

  • Wu Stephen, 2005. "Fatalistic Tendencies: An Explanation of Why People Don't Save," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-23, September.
  • Handle: RePEc:bpj:bejeap:v:contributions.4:y:2005:i:1:n:11
    DOI: 10.2202/1538-0645.1458
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1538-0645.1458
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    File URL: https://libkey.io/10.2202/1538-0645.1458?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Reis, Ricardo, 2006. "Inattentive consumers," Journal of Monetary Economics, Elsevier, vol. 53(8), pages 1761-1800, November.
    2. Michael Kremer, 1996. "Integrating Behavioral Choice into Epidemiological Models of AIDS," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 549-573.
    3. Esther Duflo & Emmanuel Saez, 2003. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 815-842.
    4. Michael Kremer, 1996. "Integrating Behavioral Choice into Epidemiological Models of the AIDS Epidemic," NBER Working Papers 5428, National Bureau of Economic Research, Inc.
    5. David I. Laibson & Andrea Repetto & Jeremy Tobacman, 1998. "Self-Control and Saving for Retirement," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 91-196.
    6. Bernheim, B. Douglas & Garrett, Daniel M., 2003. "The effects of financial education in the workplace: evidence from a survey of households," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1487-1519, August.
    7. Wu, Stephen, 2003. "Sickness and preventive medical behavior," Journal of Health Economics, Elsevier, vol. 22(4), pages 675-689, July.
    8. Diamond, P. A. & Hausman, J. A., 1984. "Individual retirement and savings behavior," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 81-114.
    9. Pollak, Robert A, 1970. "Habit Formation and Dynamic Demand Functions," Journal of Political Economy, University of Chicago Press, vol. 78(4), pages 745-763, Part I Ju.
    10. Diamond, Peter & Koszegi, Botond, 2003. "Quasi-hyperbolic discounting and retirement," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1839-1872, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Meltem Daysal, N. & Orsini, C., 2012. "Spillover Effects of Drug Safety Warnings on Health Behavior," Other publications TiSEM c6e7afb0-f661-4cf3-86f8-1, Tilburg University, School of Economics and Management.
    2. Ann L. Owen & Julio Videras & Stephen Wu, 2012. "More Information Is Not Always Better: The Case Of Voluntary Provision Of Environmental Quality," Economic Inquiry, Western Economic Association International, vol. 50(3), pages 585-603, July.
    3. Shapiro, Joel & Wu, Stephen, 2011. "Fatalism and savings," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 645-651.
    4. Paul Eliccel, 2016. "Culture and Accumulation of Capital : An Empirical study in the Context Haitian Society [Culture et accumulation du capital : une étude empirique dans le contexte social haïtien]," Working Papers hal-01555285, HAL.
    5. Eliccel Paul, 2017. "Culture et accumulation du capital : une étude empirique dans le contexte social haïtien," Working Papers hal-01567104, HAL.
    6. Becheur, Imene & Guizani, Haithem & Shaaban, Khaled, 2019. "Belief in fate and self-efficacy in road safety advertising based on guilt: An explanation based on negotiable fate," Australasian marketing journal, Elsevier, vol. 27(4), pages 233-241.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shapiro, Joel & Wu, Stephen, 2011. "Fatalism and savings," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 645-651.
    2. Kiichi Tokuoka, 2015. "Do Consumers Learn from Their Own Experiences?," The Japanese Economic Review, Japanese Economic Association, vol. 66(4), pages 466-491, December.
    3. Driscoll, John C. & Holden, Steinar, 2014. "Behavioral economics and macroeconomic models," Journal of Macroeconomics, Elsevier, vol. 41(C), pages 133-147.
    4. James Alm & Carolyn J. Bourdeaux, 2013. "Applying Behavioral Economics to the Public Sector," Hacienda Pública Española / Review of Public Economics, IEF, vol. 206(3), pages 91-134, September.
    5. Maarten C.J. van Rooij & Annamaria Lusardi & Rob J.M. Alessie, 2012. "Financial Literacy, Retirement Planning and Household Wealth," Economic Journal, Royal Economic Society, vol. 122(560), pages 449-478, May.
    6. Ivonne Honekamp, 2012. "Financial Literacy and Retirement Savings in Germany," NFI Working Papers 2012-WP-03, Indiana State University, Scott College of Business, Networks Financial Institute.
    7. Maarten C.J. van Rooij & Annamaria Lusardi & Rob J.M. Alessie, 2012. "Financial Literacy, Retirement Planning and Household Wealth," Economic Journal, Royal Economic Society, vol. 122(560), pages 449-478, May.
    8. B. Douglas Bernheim & Antonio Rangel, 2005. "Behavioral Public Economics: Welfare and Policy Analysis with Non-Standard Decision-Makers," NBER Working Papers 11518, National Bureau of Economic Research, Inc.
    9. Matti Tuomala & Sanna Tenhunen, 2013. "On the design of an optimal non-linear tax/pension system with habit formation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(3), pages 485-512, June.
    10. James J. Choi & David Laibson & Brigitte C. Madrian & Andrew Metrick, 2004. "Saving or Retirement on the Path of Least Resistance," Levine's Bibliography 122247000000000606, UCLA Department of Economics.
    11. Aileen Heinberg & Angela Hung & Arie Kapteyn & Annamaria Lusardi & Anya Savikhin Samek & Joanne Yoong, 2014. "Five steps to planning success: experimental evidence from US households," Oxford Review of Economic Policy, Oxford University Press, vol. 30(4), pages 697-724.
    12. Yao Yao, 2022. "Fertility and HIV Risk in Africa," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 45, pages 109-133, July.
    13. Andrea Galeotti & Brian W. Rogers, 2013. "Strategic Immunization and Group Structure," American Economic Journal: Microeconomics, American Economic Association, vol. 5(2), pages 1-32, May.
    14. Dionne, G. & Doherty, N., 1991. "Adverse Selection In Insurance Markets: A Selective Survey," Cahiers de recherche 9105, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    15. Margaret Miller & Julia Reichelstein & Christian Salas & Bilal Zia, 2015. "Can You Help Someone Become Financially Capable? A Meta-Analysis of the Literature," The World Bank Research Observer, World Bank Group, vol. 30(2), pages 220-246.
    16. Daniel Nettle, 2010. "Why Are There Social Gradients in Preventative Health Behavior? A Perspective from Behavioral Ecology," PLOS ONE, Public Library of Science, vol. 5(10), pages 1-6, October.
    17. Torben M. Andersen & Joydeep Bhattacharya, 2021. "Why mandate young borrowers to contribute to their retirement accounts?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(1), pages 115-149, February.
    18. Christelis, Dimitris & Jappelli, Tullio & Padula, Mario, 2010. "Cognitive abilities and portfolio choice," European Economic Review, Elsevier, vol. 54(1), pages 18-38, January.
    19. Richard D. Horan & David Finnoff & Kevin Berry & Carson Reeling & Jason F. Shogren, 2018. "Managing Wildlife Faced with Pathogen Risks Involving Multi-Stable Outcomes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(3), pages 713-730, July.
    20. Denis Cogneau & Michael Grimm, 2006. "Socioeconomic status, sexual behavior, and differential AIDS mortality: evidence from Côte d’Ivoire," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 25(4), pages 393-407, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:contributions.4:y:2005:i:1:n:11. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://www.degruyter.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.