The significance of demographic factors on key-indicator variables of consumer credit decisions

The literature on consumer financial behaviour identifies a myriad of factors that influence individuals’ financial decisions and choices. Among the key-indicator variables of consumer credit behaviour are Credit Search, Financial Risk and Credit Terms Considered. These indicator variables have been well researched and measured in the literature. Personal attributes, and in particular demographic variables, have largely been regarded as moderating variables in the literature. Although demographic variables are widely recognised by researchers as important in better understanding and predicting consumer financial behaviour, research on their relationship with the key-indicator variables of consumer credit behaviour (Credit Search, Financial Risk and Credit Terms Considered) is scarce. The objective of this paper is to contribute to the literature by exploring the significance of demographic factors on key-indicator variables of consumer credit behaviour. Data was collected from Melbourne, Australia, and the proposed hypotheses tested using paired-samples t-test. The results indicated a statistically significant difference in the pairs of means for all key-indicator variables against all three demographic factors of Gender, Age and Education. The findings confirm the influential role that demographic variables play in individual/household financial decisions, a matter which warrants further research into the nature and direction of the indentified influences. Such research would be particularly instrumental in informing policy and practice.