Inter-Temporal Preference Of Millennials In A Large Developing Economy: The Case Of Indonesia

Many say that millennials are more impatient than other generation and that they tend to spend their money easily for tertiary needs. Given that Indonesia is a large developing economy country with almost 70% of its population is in productive age, studying the millennials’ economic behavior is imperative. The global implication of millennials’ preference lends itself as Indonesia is the world’s fourth-most populous country. This study provides new insights for projecting the spending and the saving behavior of millennials which could impact the country’s future account and how the government should take advantage of demographic surplus effectively. It also participates in anticipation of financial/banking future developments and navigating through the boom and bust cycle of the economy, hence contributes to the policymakers in generating more effective policy. As most generations classifications are based on American experiences, we make another contribution in this study by adopting millennials generation classification that is uniquely based on Indonesian experience as a developing economy country. The findings indicate that millennials do spend more, less patient and more risk-taker than that of their parents. Both natural (cognitive test results) and nurtural factors (employability and spatiality) affect such behavior. The study also highlights the importance of the parents’ role for the millennials cognitive test result and therefore would have an impact on the millennials’ RRR. This research highlights experience having financial/income shocks may have a lowering effect on RRR.