Attitudes, personality factors and household debt decisions: A study of consumer credit
A fairly extensive literature from the field of empirical psychology has provided evidence that personality factors and attitudes toward credit may influence individuals' debt financing decisions. This paper investigates the importance of these factors by analysing the results of an original survey about the recourse to consumer credit, conducted on a wide sample of Italian households. Three main research questions are addressed. Is there any relationship between personality, attitude and recourse to consumer credit? Are there any differences in psychological profiles of credit users and non-users that can be associated with the motivations for using consumer credit? Does the psychological profile affect the preferred way of financing consumption? According to our analyses, the influence of psychological factors on consumer credit decisions cannot be rejected. Attitudes toward debt appear to play an important role and are significantly related to motivations for using credit and to the preferred form of financing. Personality factors do not emerge as having a clearcut effect on the decision to taking on debt. While this is in line with some previous research findings, when personality's features make a difference this is in the opposite direction of what is commonly found, as more fatalistic individuals are less likely to use consumer credit.
|Date of creation:||Feb 2012|
|Contact details of provider:|| Web page: http://www.economia.unimore.it|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tokunaga, Howard, 1993. "The use and abuse of consumer credit: Application of psychological theory and research," Journal of Economic Psychology, Elsevier, vol. 14(2), pages 285-316, June.
- Brown, Sarah & Taylor, Karl & Wheatley Price, Stephen, 2005. "Debt and distress: Evaluating the psychological cost of credit," Journal of Economic Psychology, Elsevier, vol. 26(5), pages 642-663, October.
- Marianne Bertrand & Dean Karlin & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2005.
"What's Psychology Worth? A Field Experiment in the Consumer Credit Market,"
NBER Working Papers
11892, National Bureau of Economic Research, Inc.
- Marianne Bertrand & Dean S. Karlan & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2005. "What's Psychology Worth? A Field Experiment in the Consumer Credit Market," Working Papers 918, Economic Growth Center, Yale University.
- Marianne Bertrand & Dean Karlan & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2006. "What's psychology worth? A field experiment in the consumer credit market," Natural Field Experiments 00217, The Field Experiments Website.
- Marianne Bertrand & Sendhil Mullainathan & Dean Karlan & Eldar Shafir & Jonathan Zinman, 2009. "What's Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment," Working Papers 968, Economic Growth Center, Yale University.
- Jessica Holmes & Jonathan Isham & Ryan Petersen & Paul Sommers, 2005. "Does Relationship Lending Still Matter in the Consumer Banking Sector? Evidence from Two Financial Service Organizations in Vermont," Middlebury College Working Paper Series 0511, Middlebury College, Department of Economics.
- Cox, Donald & Jappelli, Tullio, 1993. "The Effect of Borrowing Constraints on Consumer Liabilities," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(2), pages 197-213, May.
- Donald Cox & Tullio Japelli, 1993. "The Effect Of Borrowing Constraints On Consumer Liabilities," Boston College Working Papers in Economics 228, Boston College Department of Economics.
- Jappelli, Tullio & Pagano, Marco, 1989. "Consumption and Capital Market Imperfections: An International Comparison," American Economic Review, American Economic Association, vol. 79(5), pages 1088-1105, December.
- Jappelli, Tullio & Pagano, Marco, 1988. "Consumption and Capital Market Imperfection: An International Comparison," CEPR Discussion Papers 244, C.E.P.R. Discussion Papers.
- Hayhoe, Celia Ray & Leach, Lauren & Turner, Pamela R., 1999. "Discriminating the number of credit cards held by college students using credit and money attitudes," Journal of Economic Psychology, Elsevier, vol. 20(6), pages 643-656, December.
- Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1991. "Why is Italy's Savings Rate So High?," CEPR Discussion Papers 572, C.E.P.R. Discussion Papers.
- Guiso, L. & Jappelli, T. & Terlizzese, D., 1992. "Why is Italy Saving Rate so High?," Papers 167, Banca Italia - Servizio di Studi.
- Fabbri, Daniela & Padula, Mario, 2004. "Does poor legal enforcement make households credit-constrained?," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2369-2397, October.
- Daniela FABBRI & Mario PADULA, 2003. "Does Poor Legal Enforcement Make Households Credit-Constrained?," FAME Research Paper Series rp81, International Center for Financial Asset Management and Engineering.
- Bank for International Settlements, 2009. "Household debt: implications for monetary policy and financial stability," BIS Papers, Bank for International Settlements, number 46.
- Lea, Stephen E. G. & Webley, Paul & Levine, R. Mark, 1993. "The economic psychology of consumer debt," Journal of Economic Psychology, Elsevier, vol. 14(1), pages 85-119, March.
- Barone Guglielmo & Felici Roberto & Pagnini Marcello, 2006. "Il credito al consumo in Italia: prodotti, intermediari e diffusione territoriale," Banca Impresa Società, Società editrice il Mulino, issue 3, pages 477-477.
- Silvia Magri, 2007. "Italian households’ debt: the participation to the debt market and the size of the loan," Empirical Economics, Springer, vol. 33(3), pages 401-426, November.
- Davies, Emma & Lea, Stephen E. G., 1995. "Student attitudes to student debt," Journal of Economic Psychology, Elsevier, vol. 16(4), pages 663-679, December.
- Thiemo Krink & Sandra Paterlini, 2008. "Differential Evolution for Multiobjective Portfolio Optimization," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 08012, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
- Thiemo Krink & Sandra Paterlini, 2008. "Differential Evolution for Multiobjective Portfolio Optimization," Center for Economic Research (RECent) 021, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
- Watson, John J., 2003. "The relationship of materialism to spending tendencies, saving, and debt," Journal of Economic Psychology, Elsevier, vol. 24(6), pages 723-739, December.
- Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-161, January.
- Jonathan Crook, 2001. "The demand for household debt in the USA: evidence from the 1995 Survey of Consumer Finance," Applied Financial Economics, Taylor & Francis Journals, vol. 11(1), pages 83-91.
- Lea, Stephen E. G. & Webley, Paul & Walker, Catherine M., 1995. "Psychological factors in consumer debt: Money management, economic socialization, and credit use," Journal of Economic Psychology, Elsevier, vol. 16(4), pages 681-701, December.
- Hanley, Alice & Wilhelm, Mari S., 1992. "Compulsive buying: An exploration into self-esteem and money attitudes," Journal of Economic Psychology, Elsevier, vol. 13(1), pages 5-18, March.
- Rinaldi, Laura & Sanchis-Arellano, Alicia, 2006. "Household debt sustainability: what explains household non-performing loans? An empirical analysis," Working Paper Series 0570, European Central Bank.
- Livingstone, Sonia M. & Lunt, Peter K., 1992. "Predicting personal debt and debt repayment: Psychological, social and economic determinants," Journal of Economic Psychology, Elsevier, vol. 13(1), pages 111-134, March.
- Walker, Catherine M., 1996. "Financial management, coping and debt in households under financial strain," Journal of Economic Psychology, Elsevier, vol. 17(6), pages 789-807, December.
- Silvia Magri, 2002. "Italian households' debt: determinants of demand and supply," Temi di discussione (Economic working papers) 454, Bank of Italy, Economic Research and International Relations Area. Full references (including those not matched with items on IDEAS)