Certainty Broadcasts Risk Preferences: Verbal and Nonverbal Cues to Risk-Taking

People often attempt to ascertain how risky another person is willing to be. Even when this information is not purposely divulged, people may unwittingly broadcast their willingness to take risks by displaying cues to their level of certainty. Because subjective reports of feeling certain predict risk behavior, we examined whether targets’ certainty could be discerned unobtrusively and be used to predict their risky decision-making. In small groups, participants discussed two risk problems, made risk decisions, and then wrote an essay about their decision-making process. Participants’ nonverbal behavior and speech content during the group interaction, and their subsequent essay content were assessed by naïve coders and objective word-count software for cues to certainty. Subjective assessments of nonverbal behavior and objective assessments of language content revealed that certainty cues predicted greater risk propensity. Therefore, across the three communication modalities of nonverbal behavior, speech, and text, more certainty cues revealed risky behavior.     

Family identification facilitates coping with financial stress: A social identity approach to family financial resilience

Family financial stress research has typically examined negative effects of deprivation on mental health, which in turn erode financial coping. While this work acknowledges family support’s role in buffering these effects, it has typically overlooked how family identification can act to structure the experience of, and response to, economic challenge. We adopt a Social Identity approach, arguing that family identification predicts increased social support and improved well-being, which predicts more effective coping with financial problems. We explore this in two community surveys (N = 369; N = 187). In the first we show that stronger family identification and support predict better well-being, which predicts better evaluation of economic coping. In the second we replicate these findings, and also show that the relationship between well-being and financial distress is fully mediated by perceptions of ‘Collective Family Financial Efficacy’. These findings point to a more positive understanding of how family cohesion can promote mental well-being/resilience.     

What Women Do,Believe in,and Financially Contribute—What Matters More in Couples' Decision Making? Gender Inequality in Ghana's Small-Scale Fisheries☆

Studies of couple's decision-making power consistently show that women disproportionately occupy subordinate positions. Using survey data (N = 400) from an ethnographic study on Ghanaian female fisherfolk, we examine the influences of women's financial contributions, ownership of production assets and gender role attitudes, and how they interact with the bodily capacities required to perform different fishery tasks to shape women's decision-making power. Findings show that financial contributions and ownership of production assets remain salient determinants of women's fishery decision-making power. However, their participation in strenuous tasks dampens the positive relationship between their financial contributions, gender role attitudes and decision-making power, such that financial contributions become insignificant. Women's decision-making power varies according to the sex-typed division of labor in small-scale fishing, and those who violate it are ‘punished’—as evident in their decreased decision-making power. Attention to the co-implications of socio-economic forces and material factors such as women's embodied experiences highlights (1) the specificities of occupational sex segregation and decision-making in agricultural sectors of developing economies and (2) how such entanglements can be reconfigured to enhance women's decision-making power in such contexts.     

Cognitive abilities,self-efficacy,and financial behavior

This paper investigates the effect of cognitive abilities on financial behavior among older adults. Using the U.S. Health and Retirement Study, I find that cognitive abilities significantly affect financial behavior through two channels: ability and self-efficacy. People with higher cognition scores achieve better financial outcomes. This positive association is especially strong in tasks having high demand of cognitive abilities, which confirms the ability channel of the cognitive ability effect. In addition, there is evidence for the self-efficacy channel as a secondary source of cognitive influence. Lower cognitive abilities decrease people’s sense of self-efficacy, which, in turn, significantly decreases financial management efficiency. The findings have important policy implications, specifically that more effort is needed to assist the growing older population through the cognitive aging process and that noncognitive skills, as a secondary source of influence, also warrant attention.     

Where You Lead,I Will Follow: Exploring Sibling Similarity in Brain and Behavior During Risky Decision Making

This exploratory study examined whether social learning increases similarity in adolescent siblings’ behavior and neural patterns during risky decision making. Participants included 86 adolescents (43 sibling dyads; younger siblings: M_age = 12.2 years; 22 females; older siblings: M_age = 14.6 years; 20 females) who completed questionnaires, and a decision‐making task during an fMRI scan. Younger siblings became more similar to their older siblings’ risky decision making after observing their older sibling take risks). Younger siblings who reported greater modeling of their older sibling, and less differentiation from them, showed increased neural similarity to their older siblings in the ventromedial prefrontal cortex, and the right anterior insula and ventral striatum, respectively. These findings highlight siblings as salient social agents in how adolescents process risky decision making.     

Understanding and knowledge of credit cost and duration: Effects on credit judgements and decisions

Financial capability requires understanding measures of consumer credit cost and using them appropriately in credit judgements and decisions. In three studies, UK adults’ understanding and use of credit cost and duration information were investigated from a bounded rationality perspective. Study 1, part of a representative survey of UK adults (N = 1000), found that when presented with annual percentage rate (APR) participants significantly overestimated the total cost (TC) of a 12-month loan. In Study 2, loan duration and APR were varied in an independent groups experiment (N = 242). Bank customers’ TC estimates were sensitive to both loan duration and APR but TC was again substantially overestimated. Study 3 was an independent groups experiment investigating the effect of APR and TC information on credit decisions (N = 241). APR often influenced decisions between loans varying in duration and monthly repayment, but this effect was moderated by TC information. It was concluded that: (1) people generally misunderstand the relation between APR and TC; and (2) although APR information can have a large effect on credit decisions, its effect is either attenuated or amplified by TC information. The findings are interpreted in terms of a ‘take the best APR’ heuristic and a dual mental account model of instalment credit. Recommendations for improving credit information provision and financial education are offered.     

Revisiting “money illusion”: Replication and extension of Shafir,Diamond, and Tversky (1997)

Shafir et al. (1997) described money illusion as people’s inclination to think of money without taking inflation sufficiently into account, i.e., in nominal terms rather than in real terms. We successfully replicated Problems 1 to 4 of Shafir, Diamond, and Tversky’s study (1997) on money illusion (MTurk; N = 604). We found effect sizes in line with the original ones for assessments of income (Problem 1; original: Cramer’s V = 0.26, 95% CI [0.17, 0.37]; replication: V = 0.28 [0.21, 0.36]), transactions (Problem 2; original: 48% [42%, 52%]; replication: 70% [66%, 73%]), sales and consumption (Problem 3; original buy: 38% [33%, 43%]; replication buy: 47% [43%, 51%]; original sell: 43%% [38%, 48%]; replication sell: 43% [39%, 47%]), and contracts (Problem 4; original: V = 0.25 [0.13, 0.42]; replication: V = 0.17 [0.10, 0.25]). With an added extension, we found no support for the notion that knowing about or correctly estimating the inflation rate affected money illusion. We discuss theoretical implications for the study of money illusion and the psychological meaning of inflation, as well as for the understanding of the antecedents of money illusion. All data, code, and materials are available on https://osf.io/rv9mw/.     

Replication: Revisiting Tversky and Shafir’s (1992) Disjunction Effect with an extension comparing between and within subject designs

Does uncertainty about an outcome influence decisions? The sure-thing principle (Savage, 1954) posits that it should not, but Tversky and Shafir (1992) found that people regularly violate it in hypothetical gambling and vacation decisions, a phenomenon they termed “disjunction effect”. Very close replications and extensions of Tversky and Shafir (1992) were conducted in this paper (N = 890, MTurk). The target article demonstrated the effect using two paradigms in a between-subject design: here, an extension also testing a within-subject design, with design being randomly assigned was added. These results were consistent with the original findings for the “paying to know“ problem (original: Cramer’s V = 0.22, 95% (CI) [0.14, 0.32]; replication: Cramer’s V = 0.30, 95% CI [0.24, 0.37]), yet not for the “choice under risk” problem (original: Cramer’s V = 0.26, 95% CI [0.14, 0.39]; replication: Cramer’s V = 0.11, 95% CI [−0.07, 0.20]). The within-subject extension showed very similar results. Implications for the disjunction effect and judgment and decision-making theory are discussed, and a call for improvements on the statistical understanding of comparisons of between-subject and within-subject designs is introduced. All materials, data, and code are available on https://osf.io/gu58m/.     

Decomposing the age effect on risk tolerance

The importance of investment portfolio allocation has become more apparent since the onset of the late 2000s Great Recession. Individual willingness to take financial risks affects portfolio decisions and investment returns among other factors. Previous research found that people of different ages have dissimilar levels of risk tolerance but the effects of generation, period, and aging were confounded. Using the 1998–2007 Survey of Consumer Finances cross-sectional datasets, this study uses an analytical method to separate such effects on financial risk tolerance. Aging and period effects on financial risk tolerance were statistically significant. Implications for researchers and financial planning practitioners and educators are provided.     

Gambling Increases Self-Control Strength in Problem Gamblers

In two studies it is demonstrated that, in the short-term, slot machine gambling increases self-control strength in problem gamblers. In Study 1 (N = 180), participants were randomly assigned to either play slot machines or engage in a control task (word anagrams) for 15 min. Subsequent self-control strength was measured via persistence on an impossible tracing task. Replicating Bergen et al. (J Gambl Stud, doi:10.1007/s10899-011-9274-9, 2011), control condition participants categorized as problem gamblers persisted for less time than did lower gambling risk participants. However, in the slot machine condition, there were no significant differences in persistence amongst participants as a function of their gambling classification. Moreover, problem gambling participants in the slot machine condition persisted at the impossible tracing task longer than did problem gambling participants in the control condition. Study 2 (N = 209) systematically replicated Study 1. All participants initially completed two tasks known to deplete self-control strength and a different control condition (math problems) was used. Study 2 results were highly similar to those of Study 1. The results of the studies have implications for the helping professions. Specifically, helping professionals should be aware that problem gamblers might seek out gambling as a means of increasing self-control strength.     

Personality and wealth accumulation among older couples: Do dispositional characteristics pay dividends?

This paper explores whether the ‘Big 5’ personality characteristics: Emotional Stability, Extraversion, Conscientiousness, Agreeableness, and Openness to Experience, contribute to net household wealth accumulation among 1172 couple pairs (n = 2344) participating in The Irish Longitudinal Study on Ageing, independent of other socio-demographic and human capital variables. We employ quantile regression to determine whether the effects of personality vary at different levels of the conditional distribution of wealth. Results reveal that the personality characteristics of the financial respondent to the survey are more strongly associated with wealth than those of the non-financial respondent. Specifically, we find that emotional stability and extraversion are positively associated with wealth at the household level among spousal pairs. We also find that conscientiousness is positively associated with wealth, but the relationship is only significant at the lower end of the wealth continuum. In general, agreeableness and openness are negatively associated with wealth although the relationships are non-significant. These findings indicate that personality is an important factor shaping individuals’ consumption preferences and financial decision-making behaviour over the life-course.     

Neural Correlates of Conflicting Social Influence on Adolescent Risk Taking

Adolescence is often characterized by heightened risk‐taking behaviors, which are shaped by social influence from parents and peers. However, little is understood about how adolescents make risky decisions under conflicting influence. The valuation system in the brain may elucidate how adolescents differentially integrate conflicting social information. Twenty‐eight adolescents (M_age = 12.7 years) completed a social influence task during a functional magnetic resonance imaging scan. Behaviorally, adolescents took more risks only when their parent endorsed risky decisions but not when their peers endorsed risky decisions. At the neural level, adolescents showed enhanced vmPFC–striatum functional connectivity when they made risky decisions that followed their parents’ risky decisions. Results suggest that parents’ decisions may guide youths’ risk‐taking behavior under conflicting influence.     

Financial Behaviors and Financial Well-Being of College Students: Evidence from a National Survey

The purpose of this study is to explore the relationship between financial behaviors and financial well-being of college students when controlling demographic and financial characteristics, financial education and financial dispositions. Data (N = 15,797) was collected from college students age 18 and over via an online survey from 15 college campuses throughout the United States during spring and fall of 2008. Results of means comparisons showed significant differences on the financial well-being level by various socioeconomic factors and financial behaviors. In addition, regression analysis showed that budgeting, saving, risky credit card behaviors, and compulsive buying were significantly related to financial well-being when controlling for demographic information, financial characteristics, financial education, and financial dispositions.     

Financial worry among older people: Who worries and why?

This study sought to clarify what drives economic worries among older people. Based upon the data from a national sample of adults aged 65 and older in Israel (N = 550), we examined associations between financial worry and economic status, lifestyle, social network, concerns about functional health, long term care needs and cognition, and population group. The main financial worry was that pension funds will not suffice for one's entire life. Multivariate analysis revealed that financial worry was negatively related to perceived income adequacy and age, and positively related to concerns about care and to apprehensions regarding one's ability to make decisions. Immigrants from the former Soviet Union were found to worry less. Understanding the different sources of financial worries among older people is essential insofar as older people are increasingly expected to take personal responsibility for their financial futures. Dealing with negative outcomes that stem from financial worries are important programming and policy goals in an era of population aging.     

Debt out of control: The links between self-control,compulsive buying,and real debts

In a representative sample of the German population (n = 946), we explored the links between self-control, compulsive buying, and debts. Participants completed the self-control scale (Tangney, Boone, & Baumeister, 2004) and the German Addictive Buying Scale (Raab, Neuner, Reisch, & Scherhorn, 2005). Additionally, they gave information about their real debts. It was observed that self-control was negatively related to debts while compulsive buying was positively related to debts. Detailed analyses revealed that the link between self-control and debts was fully mediated by compulsive buying. Finally, there was a gender effect on compulsive buying: women were more prone to compulsive buying than men. Age also was significantly negatively related to compulsive buying and positively linked to self-control. Household income was not linked to self-control, compulsive buying, and debts. Implications for practice, policy, and research are discussed.     

Determinants of tobacco use among Korean female adolescents: Longitudinal test of the theory of triadic influence

This study aimed to examine the influences of social, attitudinal, and intrapersonal factors at three levels on tobacco use among female adolescents in South Korea using longitudinal national data. The study analyzed data from the Korean Youth Panel Study, with a study population consisting of middle-school second-graders (N = 1594). Using time dependent Cox regression, our analyses yielded the following main findings: the theory of triadic influence was verified to provide a theoretical framework for smoking among Korean female adolescents. All of the social factors at the three levels, including parental supervision, attachment to friends, and peer smoking prevalence, were found to influence tobacco use among Korean female adolescents. Stigma on the distal level and attitude towards smoking on the proximal level were significant attitudinal factors. Among intrapersonal factors, self-control on the distal level and stress on the proximal level were found to be significant. The study findings suggest that including parental education and promoting attachment to non-smoking friends, as well as enhancing sound relationships with them, would provide an effective strategy for the prevention and cessation of smoking. Prevention and cession should include strategies that alleviate stigma and stress, and improve negative attitude toward smoking and the level of self-control.     

Me,myself and money: having a financially focused self-concept and its consequences for disordered gambling

The article describes a test of the hypothesis that some people’s self-concept is overly focused on financial success and that this focus contributes to disordered gambling. Study 1 reported on the development and validation of the Financially Focused Scale (FFS) with a sample of community gamblers (N = 197). As predicted, participants whose self-concept was financially focused attached greater importance to the money they possess as a domain of self-worth. They also indicated that the money they possess is a more important domain of self-worth relative to other life domains. Importantly, greater financial focus was a positive predictor of disordered gambling severity and did so over and above other known predictors of disordered gambling severity (i.e. personal income, Big-Five personality domains, global self-esteem, personal relative deprivation and materialism). Study 2 (N = 220) replicated and extended the findings of Study 1 by examining the motivational mechanisms that may link being financially focused with disordered gambling severity. As hypothesized, monetary gambling motives mediated the relationship between participants’ FFS scores and disordered gambling severity. Having a financially focused self-concept may play a critical role in the development and maintenance of disordered gambling. Addressing this self-concept in treatment may help alleviate gambling disorder.     

Marketization process predicts trust decline in China

Although previous literature has revealed the predictive effect of trust on economic development, whether the level of China’s market economy development predicts changes in trust across birth cohorts remains unknown. Study 1, a cross-temporal meta-analysis of 82 studies (N = 34,151), indicated that Chinese college students’ scores on the Interpersonal Trust Scale (ITS) decreased significantly from 1998 to 2011, and that the decline in interpersonal trust across birth cohorts was negatively associated with and predicated by the marketization index. Study 2 found that the levels of marketization of different provinces in China were negatively associated with the levels of trust in these provinces. The present research first proposed that the marketization process in China may predict or correlate with a trend of declining trust, and then demonstrated the validity of the proposal based on both longitudinal and cross-sectional evidence.     

Role Conflict among Family Childcare Providers in the Bronx

Family childcare (FCC) providers provide childcare for many low‐income families in the United States, and the literature suggests they take on several other support roles as well. The current study consisted of focus groups and interviews in which FCC providers (N = 22) shared successes and challenges in their profession. Using grounded theory we identified four primary FCC roles: teacher, caregiver, social worker and business owner. Conflict within and between roles was related to considerable stress. Because roles varied across a spectrum from entangled to rigid professional relationship boundaries, many FCC providers struggled with the limits of their daily work. Suggestions are made to limit role conflict, re‐establish boundaries and promote FCC providers’ well‐being.     

The influence of concrete support on child welfare program engagement,progress, and recurrence

Families living in poverty are significantly more likely to become involved with child welfare services, and consequently, referred to interventions that target abusive and neglectful parenting practices. Program engagement and retention are difficult to achieve, possibly because of the concrete resource insufficiencies that may have contributed to a family's involvement with services in the first place. Various strategies have been used to enhance program completion, such as motivational interventions, monetary incentives, and financial assistance with concrete needs. This study examines the influence of adjunctive concrete support provided by home visitors on families' (N = 1754) engagement, retention, and satisfaction with services as well as parenting outcomes. Using propensity stratification, mixed modeling procedures revealed that increasing concrete support predicted greater engagement, satisfaction, goal attainment, and lower short-term recidivism. Results suggest that adjunctive concrete support is a potentially beneficial strategy for promoting service engagement and satisfaction and increasing short-term child safety.