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

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  • 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
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    References listed on IDEAS

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    Cited by:

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    5. 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.
    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.

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