Financial decision-making abilities and financial exploitation in older African Americans: Preliminary validity evidence for the Lichtenberg Financial Decision Rating Scale (LFDRS)

ABSTRACT

This study examines preliminary evidence for the Lichtenberg Financial Decision Rating Scale (LFDRS), a new person-centered approach to assessing capacity to make financial decisions, and its relationship to self-reported cases of financial exploitation in 69 older African Americans. More than one third of individuals reporting financial exploitation also had questionable decisional abilities. Overall, decisional ability score and current decision total were significantly associated with cognitive screening test and financial ability scores, demonstrating good criterion validity. Study findings suggest that impaired decisional abilities may render older adults more vulnerable to financial exploitation, and that the LFDRS is a valid tool.     

Self-control and financial risk taking

We report two studies investigating the role of self-control in risky financial decision-making, operationalized as incentivized lottery task decisions. Study 1 (N = 529) investigated the link between propensity to take financial risks and trait self-control. Study 2 (N = 321) examined whether reflecting on one’s prior successes and failures in exercising self-control has an impact on subsequent risky financial decision-making. Study 1 identified a negative link between self-control and financial risk-taking, and Study 2 found that reflecting on self-control successes lowered people’s propensity to take financial risks, while reflecting on self-control failures made people more prone to take financial risks.     

Assessment of financial decision making: an informant scale

Older adults with cognitive impairment are a population at great risk for financial exploitation. At-risk older adults often have difficulty reporting on their own financial abilities. Collecting information from trusted others is vital for professionals investigating the financial exploitation older adults. There are few reliable, valid, and standardized informant-report measures of financial capacity, and none that assess decisional abilities for an ongoing, real-world financial transaction. The present study sought to examine the psychometric properties of a new informant-report scale of financial decisional abilities in older adults. One hundred fifty participants were recruited to complete the Family and Friends and Interview regarding a known older adult’s financial decisional abilities. A factor analysis identified two subscales. The full scale had adequate sensitivity and specificity to detect an informant’s current concerns regarding financial exploitation. The Family and Friends Scale is a useful tool for collecting informant-report regarding an older adult’s ability to make financial transactions.     

Family,Peer, and Pubertal Determinants of Dating Involvement Among Adolescents

This study examines the influence of family, peer, and biological contributors to dating involvement among early adolescents (11–14 years of age; n = 244). Further, we assess how parental monitoring may be modified by pubertal maturation and older sibling risky behavior. Data on delinquent peer affiliation, pubertal maturation, parental monitoring, older sibling risky behavior, and dating involvement were gathered through observations and surveys from adolescents, mothers, older siblings, and teachers. Results indicate that lower levels of parental monitoring and higher levels of older sibling risky behavior were related to adolescents' dating involvement through delinquent peer affiliation. Pubertal maturation was directly related to dating involvement for early daters. Findings emphasize the value of examining social and biological factors, in concert, over time.     

The role of impulsivity,cognitive bias,and reasoned action in understanding college student gambling

Factors related to gambling behavior among college students in the USA are examined by applying the theory of reasoned action (TRA) and incorporating the concepts of impulsivity and cognitive bias. This study uses a broader approach to analyze gambling behavior by including financial behavior variables using ordinary least squares (OLS) and logistic regressions. The survey data were collected through a self-administered online questionnaire of college students from 19 colleges and universities in the fall of 2010. With a sample of 5024 college students, a majority of the respondents (84.45%) in this study report that they did not gamble in the last 30 days. The results of multivariate analysis indicate that gambling is related to attitudes toward gambling, cognitive bias toward gambling, subjective norms of family members regarding financial behavior, and impulsivity. Underestimation of financial behavior (cognitive bias toward financial behavior) was found to be associated with only gambling frequency but not gambling propensity.     

Effects of physical,virtual reality-based,and brain exercise on physical,cognition, and preference in older persons: a randomized controlled trial

Background

Physical exercise (PE), virtual reality-based exercise (VRE), and brain exercise (BE) can influence physical and cognitive conditions in older persons. However, it is not known which of the three types of exercises provide the best effects on physical and cognitive status, and which exercise is preferred by older persons. This study compared the effects of PE, VRE, and BE on balance, muscle strength, cognition, and fall concern. In addition, exercise effort perception and contentment in older persons was evaluated.

Methods

Eighty-four older persons (n?=?84) were randomly selected for PE, VRE, BE, and control groups. The exercise groups received 8-week training, whereas the control group did not. Balance was assessed by Berg Balance Scale (BBS) and Timed Up and Go test (TUG), muscle strength by 5 Times Sit to Stand (5TSTS) and left and right hand grip strength (HGS), cognition by Montreal Cognitive Assessment (MoCA) and Timed Up and Go test Cognition (TUG-cog), fall concern by Fall Efficacy Scale International (FES-I), exercise effort perception by Borg category ratio scale (Borg CR-10), and exercise contentment by a questionnaire.

Results

After exercise, PE significantly enhanced TUG and 5TSTS to a greater extent than VRE (TUG; p?=?0.004, 5TSTS; p?=?0.027) and BE (TUG; p?=?0,012, 5TSTS; p?<?0.001). VRE significantly improved MoCA (p?<?0.001) and FES-I (p?=?0.036) compared to PE, and 5TSTS (p?<?0.001) and FES-I (p?=?0.011) were improved relative to BE. MoCA was significantly enhanced by BE compared to PE (p?<?0.001) and both MoCA and TUG-cog were improved compared to VRE (p?=?0.04). PE and VRE significantly (p < 0.001) increased Borg CR-10 in all exercise sessions, whereas BE showed a significant improvement (p?< 0.001) in the first 4 sessions. Participants had a significantly greater satisfaction with BE than controls (p?=?0.006), and enjoyed VRE and BE more than PE (p?< 0.001). Subjects in all exercise groups exhibited benefits compared to the control group (p?< 0.001).

Conclusions

PE provided the best results in physical tests, VRE produced measurable improvements in physical and cognition scores, while BE enhanced cognition ability in older persons. Older persons preferred VRE and BE compared to PE. Both exercises are suggested to older persons to improve physical and cognitive conditions.

     

Cognitive,social, and neural determinants of diminished decision-making and financial exploitation risk in aging and dementia: A review and new model

ABSTRACT

In this article we will briefly review how changes in brain and in cognitive and social functioning, across the spectrum from normal to pathological aging, can lead to decision-making impairments that increase abuse risk in many life domains (e.g., health care, social engagement, financial management). The review will specifically focus on emerging research identifying neural, cognitive, and social markers of declining financial decision-making capacity in older adults. We will highlight how these findings are opening avenues for early detection and new interventions to reduce exploitation risk.     

Logical abilities and behavior in strategic-form games

This paper investigates the impact of cognitive abilities and preferences on behavior in games. We first measure subjects’ logical abilities and social preferences and then evaluate their influence on behavior in strategic-form games. For this purpose, we estimate how logical abilities and preferences relate to the probability of a subject being of a specific behavioral type. We find that better logical abilities increase the likelihood of sophisticated behavior. This shift is stronger for subjects who are classified as “selfish”. However, not even the most logically able, selfish subjects are identified as Nash types.     

Examining the Financial Condition of Sport Governing Bodies: The Effects of Revenue Diversification and Organizational Success Factors

Sport governing bodies play a critical role in the sport system. The purpose of this study is to analyze their financial condition, a topic that has been largely neglected in previous research. Based on financial portfolio theory, it was suggested that the level of revenue diversification has a positive effect on their financial condition (measured through total revenues, break even, profit, and investments). Also, the influence of sport-related and financial success factors was examined using data from a nationwide online survey of sport governing bodies in Germany (n = 1,080). The results provided evidence of a relatively high level of revenue diversification compared with other industries. Revenue diversification, hosting major sporting events, and cost optimization had a positive effect on the financial condition, while increasing memberships in clubs and organizing competitions had a negative influence. The findings have implications for the management of sport governing bodies.     

Development of guidelines for designing appliances for older persons

The ability of older adults to use a domestic appliance depends on their comprehension of the appliance's operation. This may depend on transfer of understanding from similar, more familiar technology. While this may assist their interaction with the new device, it may constrain the discovery of new functionality not represented in the familiar technology, and, thereby, constrain the discovery of advanced functionality. Older adults experience declining cognitive abilities associated with attention, perceptual encoding, and memory (cueing and recall). Designing appliances to extend cognitive abilities provides opportunity to prolong functional independence. Concepts from cognitive psychology, human factors, and gerontology are reviewed to explain age-related behavior towards technology to support innovative product development of technologies for older adults.     

Subjective measures of risk aversion, fixed costs, and portfolio choice

The paper investigates risk preferences among different types of individuals. We use several different measures of risk preferences, including questions on choices between uncertain income streams suggested by Barsky, Juster, Kimball, and Shapiro (1997) and a number of ad hoc measures. As in [Barsky et al., 1997] and [Arrondel and Calvo-Pardo, 2002], we first analyze individual variation in the risk aversion measures and explain them by background characteristics (both “objective” characteristics and other subjective measures of risk preference). Next we incorporate the measured risk preferences into a household portfolio allocation model, which explains portfolio shares, while accounting for incomplete portfolios and fixed costs. Our results show that a measure based on factor analysis of answers to a number of simple risk preference questions has the most explanatory power. The Barsky et al. (1997) measure has less explanatory power than this “a-theoretical” measure, suggesting that sophisticated measures based on economic theory may exceed the financial capability of respondents. Fixed costs turn out to provide an economically and statistically highly significant explanation for incomplete portfolios.     

Consumer fraud victimization and financial well-being

Using US household panel data, we provide evidence of a strong negative association between consumer fraud victimization and individuals’ perception of their financial well-being. We show that this effect is homogenous among the population and mainly stems from victimization through misrepresentation of information as well as misusage of money by third parties. We disentangle two potential channels through which victimization might reduce perceived financial well-being: psychological consequences (loss of confidence in financial matters) and economic consequences (decrease in net wealth). Our results show that fraud is more negatively associated with a loss in individuals’ confidence in financial matters than with declines in their net worth. Our findings suggest that people tend to doubt their abilities to handle financial matters after having fallen prey to fraud, which in turn carries major implications for subsequent financial decision making.     

Public Policy Implications of Elderly Interstate Migration to Oregon, 1985-1990

Abstract

Several Oregon counties received a noticeable influx of elderly migrants from other states during the 1980s. Oregon policy regarding taxes, land use, and long-term care is examined for possible influence on migration. Models of elderly migration are examined for insight into how public policy influences migration, and previous research regarding the effects of elderly migration on public policy is reviewed. Data regarding disability and financial vulnerability among elderly by migration status are analyzed for possible influence upon public policy.

Change in the population aged 65 and older mirrored state and national patterns for 1980 to 1990 and 1990 to 1999. Interstate elderly arriving in attractive counties reported a low prevalence of disability and financial vulnerability, indicating a low risk of demanding public assistance. Interstate elderly arriving in population centers reported a relatively high prevalence of disability but a low prevalence of financial vulnerability. This may suggest that Oregon's long-term care policy influenced elderly migration.     

The association of infant crying,feeding, and sleeping problems and inhibitory control with attention regulation at school age

Regulatory problems in infancy and toddlerhood have previously been associated with an increased risk of developing attention problems in childhood. We hypothesized that early regulatory problems are associated with attention problems via reduced inhibitory control. This prospective study assessed 1,459 children from birth to 8 years. Crying, feeding, and sleeping problems were assessed at 5 and 20 months via parent interviews and neurological examinations. At 20 months, inhibitory control was tested with a behavioral (snack delay) task. Attention regulation was assessed at 6 and 8 years using multiple instruments and informants. Detrimental effects of crying, feeding, and sleeping problems on attention regulation were partly mediated by children's ability to inhibit unwanted behaviors (β = ?0.04, p = 0.013). Accounting for cognition diminished this indirect effect (β = ?0.01, p = 0.209). Instead, the effects of crying, feeding, and sleeping problems on attention regulation were fully mediated by children's cognitive functioning (β = ?0.10, p < 0.001). These results support that inhibitory control abilities partly mediate effects of crying, feeding, and sleeping problems. However, these effects may be accounted for by children's general cognitive abilities. Early regulatory problems may set infants on a course of under control of behavior into school age, and such trajectories are highly associated with general cognitive development.     

Psychological Vulnerability and Problem Gambling: The Mediational Role of Cognitive Distortions

Despite numerous studies demonstrating the influence of cognitive distortions on gambling problem severity, empirical data regarding the role of psychological vulnerability on the latter is limited. Hence, this study assesses the mediating effect of cognitive distortions between psychological vulnerability (personality and mood), and gambling problem severity. It also verifies whether the relationships between these variables differs according to the preferred gambling activity. The sample is composed of 272 male gamblers [191 poker players; 81 video lottery terminal (VLT) players] aged between 18 and 82 years (M = 35.2). Bootstrap analysis results revealed that cognitive distortions mediate the effect of narcissism on gambling problem severity for both groups. The level of depression for VLT players significantly predicted gambling problem severity, both directly and indirectly via the mediating effect of cognitive distortions. Mediation analyses also indicated that narcissism had an indirect impact on problem gambling through cognitive distortions for both groups. These findings suggest that certain vulnerabilities related to personality and mood may influence cognitive distortion intensity and gambling problem severity. In addition, psychological vulnerabilities could differ based on preferred gambling activity. These results may be useful for prevention policies, identifying high risk gamblers and planning psychological interventions.     

Playing to the Test: Organizational Responses to Third Party Ratings

External ratings of organizations have proliferated in the last few decades, impacting not only the behavior of consumers but also of the organizations being rated. This phenomenon has been widely studied in regards to the U.S. News and World Reports ratings of universities and law schools. This article strives to understand how third party ratings impact the behavior of nonprofits using the financial data the nonprofits provide in their IRS Forms 990. The results show that such ratings are, in fact, having an effect on how nonprofits report financial information on the IRS Form 990.     

Financial Exploitation of Older Persons

Abstract

Financial exploitation is a recognized social problem of unknown, though likely increasing, magnitude. It can occur through numerous methods, including the misuse of powers of attorney and guardianship, illegal transfers of property, and outright fraud and theft. Financial crimes against older persons are difficult to address because they often go unreported. This paper provides a summary of findings from a study of financial exploitation of older persons. We review what is known about the nature and scope of financial exploitation of older persons and describe barriers to addressing the problem. We also identify gaps in knowledge, discuss current methods for addressing financial exploitation, and provide recommendations and suggested policy approaches for prevention and remediation.     

Greed and adolescent financial behavior

Financial problems in adolescents have increased over the last decades. We investigated if individual differences in greed relate to financial behavior. Greed is an important motive for economic behavior and refers to the tendency to never be satisfied and to always want more. We developed a short version of the Dispositional Greed Scale (Seuntjens, Zeelenberg, Van de Ven, & Breugelmans, 2015), which we then used in a large survey with adolescents (N = 3899). Dispositional greed is associated with them having more income, spending more, saving less often, and having debt more often. Identifying what personality characteristics influence financial behavior at a young age is important, as the financial habits that people learn during adolescence persist in adulthood. We find that greed has both positive effects (having a higher income), but also negative effects with the greedy being less likely to save and being more likely to have a debt.     

When good is good: A virtuous circle of self-efficacy and flow at work among teachers

Abstract

The objective of this study was to extend the channel model of flow (Csikszentmihalyi, 1975, 1990) by including self-efficacy as predictor of the challenges-skills combination, and of the flow experience itself, based on the predictions of social cognitive theory (Bandura, 1997, 2001). We conducted a two-wave longitudinal study among 258 secondary school teachers. Results, first, showed that the channel model of flow, including self-efficacy as antecedent of flow, fitted better the data. Secondly, it was observed that the more self-efficacy the more flow frequency and higher levels of challenge and skills which, in turn, predicted flow over time. Moreover, the influence of self-efficacy on flow over time was mediated by subjects' perception of the challenges and skills combination. Finally, we discuss the theoretical and practical implications of integrating flow theory into the social cognitive theory.