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Little is known about the motivations and outcomes of sellers in remunerated markets for human materials. We exploit dramatic growth in the U.S. blood plasma industry to shed light on the sellers of plasma. Sellers tend to be young and liquidity-constrained with low incomes and limited access to traditional credit. Plasma centers absorb demand for nontraditional credit. After a plasma center opens nearby, demand for payday loans falls by over 13% among young borrowers. Meanwhile, foot traffic increases by over 4% at nearby stores, suggesting that constrained households use plasma markets to smooth consumption without appealing to high-cost debt. [ABSTRACT FROM AUTHOR]

Does mental accounting matter for total consumption expenditures? We exploit a unique setting in which individuals exogenously receive a new payment card, without requesting one. Using random variation in the time of receipt, we show that individuals temporarily increase total consumption expenditure by making purchases with the new card without reducing spending on the others. We do not observe a corresponding increase in indebtedness. Total consumption expenditure rises even for the least liquidity-constrained individuals. The evidence is consistent with consumers treating methods of payment as nonfungible budget categories, as suggested by models of mental accounting and narrow bracketing. [ABSTRACT FROM AUTHOR]

We study how consumer spending responds to digital payments, using the differential switch to digital payments across consumers induced by the sudden 2016 Indian Demonetization for identification. Digital payment use rose by 2.94 percentage points and monthly spending increased by 2.38% for an additional 10 percentage points in prior cash dependence. Spending remained elevated even when cash availability recovered. Robustness analyses show that the spending response is not driven by purchase substitution, income shocks, credit supply, or price changes. We provide causal evidence that digital payments increase consumer spending due to subdued endowment effects. [ABSTRACT FROM AUTHOR]

This article analyses the consumer's decision to apply for credit and the probability of the credit being accepted in the euro area during a period characterized by the unprecedented concomitance of events and changing borrowing conditions linked to the global coronavirus disease 2019 (COVID-19) pandemic and the Russian invasion of Ukraine. We use data between 2020Q1 and 2023Q2 from the ECB's Consumer Expectations Survey. We find that credit demand is the highest when the first lockdown ends and it drops when supportive monetary compensation schemes are implemented. There is evidence that constrained households are significantly less likely to apply for credit. Credit is more likely to be accepted under favourable borrowing conditions and after the approval of national recovery plans. We also find that demographic, economic factors, perceptions, and expectations are associated with the demand for credit and the credit grant. [ABSTRACT FROM AUTHOR]

Using account-level credit card data from a large Turkish bank, we study the impact of a unique credit card policy that increases minimum payment on consumption and debt repayment. We show that the policy reduces credit card spending and debt, boosts existing debt repayment, and reduces credit card delinquency. The credit card debt of affected consumers falls on average by 50 |$\%$| two years into the policy's implementation. An increase in minimum payment has a stronger effect than does a decrease of a similar magnitude. We build a benchmark life cycle model with soft liquidity constraint to explain the reduction in credit card spending. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

Previous literature has pointed to strong links between religion and economic outcomes. However, little is known about how individual consumers ’ religiosity is related to their financial management outcomes. Using longitudinal data from a national representative survey of households in Poland (more than 90% of believers declaring Roman Catholic religious denomination), we examine the associations between religious service attendance (RSA) and three subsequent consumer financial outcomes: savings, debt, and financial satisfaction. Social contacts, general trust, and risk tolerance have been tested to mediate these associations. The results indicate that RSA is prospectively associated with all three consumer financial outcomes: savings (positive), debt (negative), and financial satisfaction (positive). Only one mediation effect was found: the association between RSA and savings is mediated by social contacts. This implies that religiosity, as measured by RSA, is prospectively associated with financial outcomes, and social contacts have some potential to mediate the process. The channels through which religion influences financial conditions require additional research.

This study explores financial literacy (FL) and its influence on market participation among rural residents in China. Using the 2017 China Household Finance Survey, we find that rural residents have low FL and answer only 33% of basic and 20.8% of advanced questions on average. The findings indicate a substantial disparity in their FL skills. The ordinary least squares regression results reveal that advanced FL is statistically positively related to market participation. To mitigate endogeneity concerns, we adopt the instrument variable estimator within the generalized method of moment (IV-GMM). The IV-GMM results indicate that FL positively affects the market participation of Chinese rural households. The probability of market participation increases by over 7% with every unit increase in advanced FL scores. Additionally, the robustness tests confirm the positive correlation between advanced FL and market participation. Furthermore, the impact of FL on stock-market participation is more pronounced among rural residents in economically developed regions and those with greater financial assets.

This paper surveys what we have learned on financial literacy and its relation to financial behavior from data collected in the Dutch Central Bank (DNB) Household Survey, a project done in collaboration with academics. A pioneering survey fielded in 2005 included an extensive set of financial literacy questions and questions that can serve as instruments for financial literacy in regression analyses to assess the causal effect of financial literacy on behavior. We describe how this survey spurred a series of research papers demonstrating the crucial role of financial literacy in stock market participation, retirement planning, and wealth accumulation. This inspired various follow-up studies and experiments based on new data collections in the DNB Household Survey. Researchers worldwide have used these data for innovative studies, and other surveys have included similar questions. This case study exemplifies the essential role of data in empirical research, showing how innovative data collections can inspire new research initiatives and significantly contribute to our understanding of household financial decision-making. [ABSTRACT FROM AUTHOR]

This study documents the credit outcomes of older adults immediately before and after the onset of the COVID-19 pandemic in the United States. On average, older adults experienced larger reductions in total household debt relative to younger adults. However, there is significant heterogeneity, where older adults with higher incomes experienced the largest declines, and lower-income older adults experienced an increase in total debt. Overall, these data highlight important trends in the credit experiences of older adults that may affect their future financial security. [ABSTRACT FROM AUTHOR]

This paper analyzes the distribution of household portfolios in Türkiye using a fresh data set, the Central Bank of the Republic of Türkiye – Household Finance and Consumption Survey. The empirical analysis concentrates on the motives behind household saving preferences and the distribution of household portfolios. Moreover, the financial situation of households in Türkiye is compared with Euro area countries. First, we find that income and household characteristics are among the leading determinants of households' portfolio choices in Türkiye. Second, we reveal that households’ portfolios are under-diversified, since they own relatively small amounts of financial wealth and hold a few types of financial assets. Furthermore, risky asset categories such as shares of publicly traded companies are rarely included among them. Third, households are more likely to invest in financial assets as their income increases, but the share of financial assets in total wealth remains subdued as household income increases, since at that point real estate wealth becomes dominant. Finally, we discover that households are more likely to be in debt in Türkiye compared to households from the Euro area. Additionally, they are more likely to accumulate non-collateralized debt and also private debt, which is owed to friends and relatives to be repaid. However, the percentage of households with mortgage debt and the share of mortgage debt in total household liabilities are smaller in Türkiye, suggesting that many households have to rely on their own funds or private loans to purchase homes. As a result, we can argue that households need to be encouraged to invest a larger share of their wealth in financial assets to raise household savings and to deepen financial markets in Türkiye.

The pandemic-induced economic crisis has seen a massive increase in savings as households could not spend their income. The last time that consumers were seriously rationed was during the Second World War. This article models the behaviour of households during the War years and its immediate aftermath in Ireland, Sweden, the US and UK. Savings were held in liquid form and, once the War was over and rationing eased, a consumption boom transpired. However, significant excess savings were converted into physical assets in the housing market. There is evidence that this pattern is being repeated as the Covid-19 crisis eases. [ABSTRACT FROM AUTHOR]

Target-date funds in corporate retirement plans grew from $5 billion in 2000 to $734 billion in 2018, partly because federal regulation sanctioned these as default investments in automatic enrollment plans. We show that adopters delegated pension investment decisions to fund managers selected by plan sponsors. Inclusion of these funds in retirement saving menus raised equity shares, boosted bond exposures, curtailed cash/company stock holdings, and reduced idiosyncratic risk. The adoption of low-cost target-date funds may enhance retirement wealth by as much as 50% over a 30-year horizon. [ABSTRACT FROM AUTHOR]

Little is known about how the social environment influences payment behavior. Using detailed payment diary data of Dutch consumers we show that payment behavior is likely influenced by peer effects, especially when the environment is characterized by strong social cohesion. The results imply that besides traditional policy interventions such as consumer education, lowering costs, and enhancing the convenience of using electronic payments, diffusion and transmission of norms through social channels can enhance the adoption of electronic payments. [ABSTRACT FROM AUTHOR]

This study examines the link between households' leverage, their liquid assets such as cash holdings or checking accounts, and the Marginal Propensity to Consume (MPC) out of income changes (the effect of an additional dollar of income on consumption) for South Korean households over 2012–2017. To build on previous studies, we precisely redefine the hand-to-mouth households (defined broadly as those who hold little or no liquid assets), and examine the asymmetric effects of the direction of income changes on MPCs. By using the methodology of Hansen (2000), we estimate the threshold of the liquidity ratio (defined as liquid assets to monthly after-tax income) and find that households with liquid assets less than about 2 months of after-tax income show higher MPCs than others. We also find that the leverage ratio and newly defined hand-to-mouth status show asymmetric effects on MPCs by the direction of income changes. The MPC of households with positive income changes is smaller than that of those with negative ones. Furthermore, hand-to-mouth households with high leverage are much more sensitive to negative income changes than positive ones. This result suggests that in economic circumstances where households are highly in debt and have insufficient liquid assets, consumption is likely to be vulnerable to negative income changes, which could hamper aggregate spending growth. [ABSTRACT FROM AUTHOR]

In this paper, we analyze the wealth accumulation and saving behavior of the retired elderly in Italy using micro data from the "Survey of Italian Households' Income and Wealth," a panel survey of households conducted every 2 years by the Bank of Italy. We find that, on average, the retired elderly in Italy are decumulating their wealth (dissaving) but that their wealth decumulation rates are much slower than expected. Moreover, we also find that more than 40% of the retired elderly in Italy are continuing to accumulate wealth and that more than 80% are doing positive amounts of saving. Thus, the Wealth Decumulation Puzzle (the tendency of the retired elderly to decumulate their wealth more slowly than expected) appears to apply in the case of Italy, as it does in most other countries, before as well as after the Global Financial Crisis. Moreover, our regression analysis of the determinants of the wealth accumulation and saving behavior of the retired elderly in Italy suggests that the lower than expected wealth decumulation rates and dissaving of the retired elderly in Italy is due largely to intergenerational transfers (bequests and inter vivos transfers) and saving for precautionary purposes, especially the former. [ABSTRACT FROM AUTHOR]

This study examines the effect of financial inclusion on poverty and vulnerability to poverty of Ghanaian households. Using data extracted from the seventh round of the Ghana Living Standards Survey in 2016/17, a multiple correspondence analysis is employed to generate a financial inclusion index, and three-stage feasible least squares is used to estimate households' vulnerability to poverty. Endogeneity associated with financial inclusion is resolved using distance to the nearest bank as an instrument in an instrumental variables probit technique. Results showed that while 23.4% of Ghanaians are considered poor, about 51% are vulnerable to poverty. We found that an increase in financial inclusion has two effects on household poverty. First, it is associated with a decline in a household's likelihood of being poor by 27%. Second, it prevents a household's exposure to future poverty by 28%. Female-headed households have a greater chance of experiencing a larger reduction in poverty and vulnerability to poverty through enhanced financial inclusion than do male-headed households. Furthermore, financial inclusion reduces poverty and vulnerability to poverty more in rural than in urban areas. Governments are encouraged to design or enhance policies that provide an enabling environment for the private sector to innovate and expand financial services to more distant places. Government investment in, and regulation of, the mobile money industry will be a necessary step to enhancing financial inclusion in developing countries. [ABSTRACT FROM AUTHOR]

This study investigated the relationship between financial knowledge and financial well-being and included the moderating role of propensity to plan. This study used the Consumer Financial Protection Bureau's measure of financial well-being as it explains consumers' subjective sense of it. Results from the 2016 National Financial Well-Being Survey showed that financial knowledge and a propensity to plan were associated positively with financial well-being. This study also confirmed that the propensity to plan plays a moderating role that enhances the positive association between financial knowledge and financial well-being. Results from this study provide insights for financial practitioners, educators, and policymakers who help US households improve their financial well-being. [ABSTRACT FROM AUTHOR]

Students entering college have limited financial experience while making complex borrowing decisions. This paper examines a policy lever that may improve these decisions: high school personal finance graduation requirements. We use a difference‐in‐difference strategy to determine their effects on financial aid decisions of incoming freshmen at 4‐year institutions. Our results suggest financial education shifts students from high‐cost to low‐cost financing. The requirements increase aid applications and acceptance of federal loans, while decreasing the likelihood of holding credit card balances. Students from less affluent family backgrounds reduce their likelihoods of working and borrowers from more affluent backgrounds reduce private loan amounts. [ABSTRACT FROM AUTHOR]

This study demonstrates the way investors psychological traits influence their financial behaviors in the stock market. Results from the Health and Retirement Study show that anxious individuals are reluctant to participate in the stock market and have a lower level of risky investments. Anxiety's effect is more pronounced for less educated investors, implying that anxiety about the unknown stock market drives this effect. Analysis of individual traumatic experiences as instruments for the current anxiety level suggests a causal effect of anxiety on investment decisions. [ABSTRACT FROM AUTHOR]

We test whether Asian parents place more importance on helping their children with college costs than parents in other racial/ethnic groups. Some previous research has shown that Asian parents are more likely than comparable White parents to list saving for college as an important goal, but does that indicate that they place more importance on helping their children with college costs? Descriptive analyses of the 2013 Survey of Consumer Finances indicate that Asian parents are more likely than White parents to (1) expect to contribute to their children's college costs and (2) list college as an important saving goal. Our logistic regression controlling for household characteristics shows that among households with at least one child age 13 to 17, Asian parents are not different from parents with other racial/ethnic identification in expecting to contribute to their children's college costs. Controlling for household characteristics and expecting to contribute to their children's college costs, White parents have less than half of the odds of listing college as an important saving goal as Asian parents. However, listing college as a saving goal may not be a good indicator of the importance placed by parents of college for their children, as there are other ways to help with college costs, including borrowing, contributing out of current income, and some parents may consider the goal as having been met by their own previous savings or the savings of relatives. [ABSTRACT FROM AUTHOR]

Previous research indicates that changes in housing wealth affect consumer spending on cars. We find that home equity extraction plays only a small role in this relationship. Consumers rarely use funds from equity extraction to purchase a car directly, even during the mid‐2000s' housing boom; this finding holds across three nationally representative household surveys. We find in credit bureau data that equity extraction does lead to a statistically significant increase in auto loan originations, consistent with equity extraction easing borrowing constraints in the auto loan market. This channel, though, accounts for only a tiny share of overall car purchases. [ABSTRACT FROM AUTHOR]

This study aims to shed light on the relationship between individual and regional Christian religion (and religiosity) and individual sustainable behaviors in an exploratory manner, with a special focus on sustainable consumption and investment decisions. To this end, we econometrically analyze online representative survey data that contains information on the self-reported importance of the consideration of ecological and social/ethical criteria in the context of a large variety of individual behaviors. The target group are financial decisions makers in German households, i.e., important actors in the largest economy in Europe. Results of the econometric analysis suggest that Christian religion is positively related to a variety of (self-reported) ecological and social/ethical activities. Our findings empirically support explanations postulating a positive relationship between Christian religion and environmental behavior, such as the stewardship hypothesis, rather than opposite theories like White's (Science 155(3767):1203–1207, 1967) dominion hypothesis. Particularly, we find that both individual and regional measures for Christian religion positively affect various behaviors emphasizing the importance of individual and contextual norms for individual behavior. Hence, we provide empirical evidence for the importance of Christian religion for another country than the USA, which is typically in the focus of similar studies. Our results can be used for targeted information campaigns by politicians to enhance sustainable behaviors or acceptance for related policy measures. [ABSTRACT FROM AUTHOR]

The paper investigates the economic consequences of financial difficulties. A unique quarterly panel dataset from 2004–2011 from Estonia, a euro area country, makes it possible to estimate the quarterly spending response to debt repayment problems on top of the effect of income and indebtedness. The results imply that problems lead to a substantial short-term drop in spending. Although spending recovers after the debt repayment problems are resolved, the increase is smaller than the original decline and spending remains at a lower level than before the problems emerged. An important finding is that the longer the problems last, the more severe the decline in spending is. The results suggest that the experience of debt repayment problems has severe long-term economic implications, a cost that should be taken into account when the consequences of indebtedness are assessed. [ABSTRACT FROM AUTHOR]

We build a model of consumers' payment behaviour that includes socio-psychological factors and test it empirically by focussing on the choice between cash and electronic payments in the Netherlands. Our model outperforms the traditional model used to explain payment usage. Moreover, we provide useful insights for those who want to understand and steer payment behaviour. How consumers actually pay mainly depends on how they intend to pay and their payment habits. Attitudes, feelings and perceived best-suited payment behaviour are key factors related to payment intentions. Social norms and perceived control over the payment instrument choice matter too. [ABSTRACT FROM AUTHOR]

This study investigates the role of financial knowledge in various short-term and long-term financial behaviors among Millennials in the United States. Results from the 2015 National Financial Capability Study (NFCS) indicate that Millennials have lower levels of objective financial knowledge and similar levels of perceived financial knowledge as compared to all households. Consistent multivariate results find financial knowledge to be positively associated with performing positive short-term and long-term financial behaviors. Results are found to be robust across different measurements of financial knowledge and behavior, and the issue of the potential for reverse causality is specifically addressed. This study provides a comprehensive financial profile of Millennials with important insight for policymakers as well as financial practitioners. [ABSTRACT FROM AUTHOR]

Erwartungen über die Inflation, Immobilienpreise oder das Wirtschaftswachstum sind von zentraler Bedeutung in Modellen des Konsum- und Finanzverhaltens. Sie spielen zudem eine wichtige Rolle in den Transmissionsmechanismen der Geld- und Fiskalpolitik. Die empirische Evidenz zur Erwartungsbildung und zum kausalen Effekt von makroökonomischen Erwartungen im wirtschaftlichen Handeln von Haushalten ist jedoch noch immer begrenzt. Christopher Roth und Johannes Wohlfart legen den aktuellen Stand der empirischen Forschung zu diesen Themen dar, erörtern offene Forschungsfragen sowie die Implikationen der Forschungsergebnisse für die Geld- und Fiskalpolitik. [ABSTRACT FROM AUTHOR]