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Influence of the Consideration of Future Consequences on Financial Behavior: The Case of Japanese Individual Investors

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  • Toru Suehiro
  • Koichi Takeda
  • Takashi Kozu
  • Toshihiko TAKEMURA

Abstract

We analyze the impact of the “consideration of future consequences” (CFC) on the amount of financial assets and the liabilities of individual investors by applying a Tobit model to data from a web-based survey. We find that impatient individuals with high CFC have fewer deposits and financial asset balances. We also examine the influence of the CFC-immediate (CFC-I) and CFC-future (CFC-F) sub-indicators often used in psychology as well as CFC on financial asset balances and liabilities. CFC-I show concern with immediate consequences and also an index related to ego depletion. We find that the higher the CFC-I, the lower the amount of deposits and financial asset balances. However, CFC-F is a sub-indicator designating lack of concern with future consequences; thus, the higher the CFC-F, the larger the debt.

Suggested Citation

  • Toru Suehiro & Koichi Takeda & Takashi Kozu & Toshihiko TAKEMURA, 2019. "Influence of the Consideration of Future Consequences on Financial Behavior: The Case of Japanese Individual Investors," Journal of Economics and Behavioral Studies, AMH International, vol. 11(4), pages 54-60.
    • Handle: RePEc:rnd:arjebs:v:11:y:2019:i:4:p:54-60
    DOI: 10.22610/jebs.v11i4(J).2920
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    References listed on IDEAS

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    1. Webley, Paul & Nyhus, Ellen K., 2013. "Economic socialization, saving and assets in European young adults," Economics of Education Review, Elsevier, vol. 33(C), pages 19-30.
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