Debts and Savings from a Behavioral and Financial Literacy Perspective
(2013) NEKH01 20131Department of Economics
- Abstract
- By extending the neo-classical economic framework to a behavioral and financial literacy level this thesis intends to give a better understanding for how individuals make decisions concerning loans and savings. I find there is a broad support for the notion that these extensions can explain why some individuals are overindebted and accumulate insufficient savings for their retirement. As a direct result, the permanent income hypothesis can be considered a rather blunt tool to model life-cycle consumption patterns. Further, educational programs are likely to help reduce some of the biased behavior and saving schemes can be developed to facilitate the behavioral anomalies. This will increase saving levels and thus, indirectly prohibiting... (More)
- By extending the neo-classical economic framework to a behavioral and financial literacy level this thesis intends to give a better understanding for how individuals make decisions concerning loans and savings. I find there is a broad support for the notion that these extensions can explain why some individuals are overindebted and accumulate insufficient savings for their retirement. As a direct result, the permanent income hypothesis can be considered a rather blunt tool to model life-cycle consumption patterns. Further, educational programs are likely to help reduce some of the biased behavior and saving schemes can be developed to facilitate the behavioral anomalies. This will increase saving levels and thus, indirectly prohibiting over-consumption and overindebtness. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/3808205
- author
- Ekman, Nils LU
- supervisor
-
- Jerker Holm LU
- organization
- course
- NEKH01 20131
- year
- 2013
- type
- M2 - Bachelor Degree
- subject
- keywords
- Behavioral biases, Behavioral economics, Savings ratio, Debt ratio, Financial literacy, Life-cycle consumption theory, Consumption smoothing
- language
- English
- id
- 3808205
- date added to LUP
- 2013-06-20 10:24:40
- date last changed
- 2013-06-20 10:24:40
@misc{3808205, abstract = {{By extending the neo-classical economic framework to a behavioral and financial literacy level this thesis intends to give a better understanding for how individuals make decisions concerning loans and savings. I find there is a broad support for the notion that these extensions can explain why some individuals are overindebted and accumulate insufficient savings for their retirement. As a direct result, the permanent income hypothesis can be considered a rather blunt tool to model life-cycle consumption patterns. Further, educational programs are likely to help reduce some of the biased behavior and saving schemes can be developed to facilitate the behavioral anomalies. This will increase saving levels and thus, indirectly prohibiting over-consumption and overindebtness.}}, author = {{Ekman, Nils}}, language = {{eng}}, note = {{Student Paper}}, title = {{Debts and Savings from a Behavioral and Financial Literacy Perspective}}, year = {{2013}}, }