The Determinants of Micro Saving
(2013) NEKH01 20122Department of Economics
- Abstract
- It is more difficult for the poor to save money than for the wealthy. The poor have no institutions to help them such as state pensions and they are left to fight their personal short comings themselves. One consequence is that the poor save under their ability. Savings is important to respond to changes in the environment and to avoid incurring debt. Two of the behavioral obstacles the poor face in order to save are inconsistent time preferences in the form of hyperbolic time preferences and temptation goods. Such time preferences cause self-control issues and procrastination of important decisions.
By controlling for various socioeconomic variables such as schooling and age I targeted certain behavioral determinant of saving, notably... (More) - It is more difficult for the poor to save money than for the wealthy. The poor have no institutions to help them such as state pensions and they are left to fight their personal short comings themselves. One consequence is that the poor save under their ability. Savings is important to respond to changes in the environment and to avoid incurring debt. Two of the behavioral obstacles the poor face in order to save are inconsistent time preferences in the form of hyperbolic time preferences and temptation goods. Such time preferences cause self-control issues and procrastination of important decisions.
By controlling for various socioeconomic variables such as schooling and age I targeted certain behavioral determinant of saving, notably hyperbolic time preferences and temptation goods, in my study. It turns out that the individuals with hyperbolic time preferences displayed signs of having problems of self-control in regards of temptation goods. Where financial instruments were not available the existence of inconsistent time preferences posed a large hindrance to saving in comparison to the area where formal saving was available. This confirms earlier research and stresses the importance of access to formal savings. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/4053843
- author
- Kahn, Cecilia LU
- supervisor
- organization
- course
- NEKH01 20122
- year
- 2013
- type
- M2 - Bachelor Degree
- subject
- keywords
- Micro Saving, Behavior, Hyperbolic Time Preference, Temptation, Risk Aversion
- language
- English
- id
- 4053843
- date added to LUP
- 2013-10-14 10:02:02
- date last changed
- 2013-10-14 10:02:02
@misc{4053843,
abstract = {{It is more difficult for the poor to save money than for the wealthy. The poor have no institutions to help them such as state pensions and they are left to fight their personal short comings themselves. One consequence is that the poor save under their ability. Savings is important to respond to changes in the environment and to avoid incurring debt. Two of the behavioral obstacles the poor face in order to save are inconsistent time preferences in the form of hyperbolic time preferences and temptation goods. Such time preferences cause self-control issues and procrastination of important decisions.
By controlling for various socioeconomic variables such as schooling and age I targeted certain behavioral determinant of saving, notably hyperbolic time preferences and temptation goods, in my study. It turns out that the individuals with hyperbolic time preferences displayed signs of having problems of self-control in regards of temptation goods. Where financial instruments were not available the existence of inconsistent time preferences posed a large hindrance to saving in comparison to the area where formal saving was available. This confirms earlier research and stresses the importance of access to formal savings.}},
author = {{Kahn, Cecilia}},
language = {{eng}},
note = {{Student Paper}},
title = {{The Determinants of Micro Saving}},
year = {{2013}},
}