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Propensity toward indebtedness: An analysis using behavioral factors

Author

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  • Flores, Silvia Amélia Mendonça
  • Vieira, Kelmara Mendes

Abstract

This study aims to construct a model of propensity toward indebtedness using behavioral factors from 1046 inhabitants in Santa Maria (RS), Brazil. A questionnaire comprising 90 questions was administered. The questionnaire addressed demographic and cultural variables and seven behavioral factors: financial literacy, risk perception, risk behavior, emotion, materialism, indebtedness, and money-related values. Results indicate high risk perception, conservative risk behavior, and low levels of indebtedness and materialism. The tests reveal a significant difference in the level of debt according to age, gender, marital status, education, religion, religious principles, occupation, family income, credit card, and dependence on credit. In structural equation modeling, eight of the 10 original hypotheses are confirmed and three new ones inserted. The results also indicate positive influences from the constructs materialism and risk behavior and negative influences from the constructs risk perception, emotion, and value of money.

Suggested Citation

  • Flores, Silvia Amélia Mendonça & Vieira, Kelmara Mendes, 2014. "Propensity toward indebtedness: An analysis using behavioral factors," Journal of Behavioral and Experimental Finance, Elsevier, vol. 3(C), pages 1-10.
    • Handle: RePEc:eee:beexfi:v:3:y:2014:i:c:p:1-10
    DOI: 10.1016/j.jbef.2014.05.001
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    Citations

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    Cited by:

    1. Benyan Tan & Yingzhu Guo & Yan Wu, 2024. "The influence and mechanism of female-headed households on household debt risk: empirical evidence from China," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.
    2. Aswathi Rebecca Asok & Joe Cox, 2024. "Debt Attitude and Debt Accumulation among Rural Poor Households in a Developing Region: A Q-squared Approach," Working Papers in Economics & Finance 2024-03, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
    3. Kumar, Satish & Rao, Sandeep & Goyal, Kirti & Goyal, Nisha, 2022. "Journal of Behavioral and Experimental Finance: A bibliometric overview," Journal of Behavioral and Experimental Finance, Elsevier, vol. 34(C).
    4. Hajar Chetioui & Yassine El Bouchikhi & Mohamed Makhtari & Meriem Sahli & Hind Lebdaoui, 2024. "An Investigation of the Impact of Financial Literacy on Households’ Financial Well-Being: An Emerging Market Study," International Journal of Economics and Financial Issues, Econjournals, vol. 14(3), pages 97-105, May.
    5. Mahfuzur Rahman & Nurul Azma & Md. Abdul Kaium Masud & Yusof Ismail, 2020. "Determinants of Indebtedness: Influence of Behavioral and Demographic Factors," IJFS, MDPI, vol. 8(1), pages 1-14, February.
    6. Anna M. Helka & Dominika Maison, 2021. "Predictors of the Propensity to Incur Loans for Varying Purposes in the Future," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 1114-1128.
    7. Heo, Wookjae & Lee, Jae Min & Park, Narang & Grable, John E., 2020. "Using Artificial Neural Network techniques to improve the description and prediction of household financial ratios," Journal of Behavioral and Experimental Finance, Elsevier, vol. 25(C).
    8. Lebdaoui, Hind & Chetioui, Youssef, 2021. "Antecedents of consumer indebtedness in a majority-Muslim country: Assessing the moderating effects of gender and religiosity using PLS-MGA," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
    9. Ján Buleca & Nikola Šubová & Lenka Malièká, 2022. "The Relationship between Household Wealth and Financial Vulnerability in the Post-communist Countries of the Euro Area," Journal of Economics / Ekonomicky casopis, Institute of Economic Research, Slovak Academy of Sciences, vol. 70(7-8), pages 569-588, July.
    10. Maria Forlicz & Tomasz Rolczynski, 2020. "Relationship Between Personal Debt Arrears and Risk Attitude– Cross Country Evidence," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 586-599.

    More about this item

    Keywords

    Behavioral finance; Propensity to indebtedness; Behavioral factors;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • M30 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - General

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