Mental discounting and financial strategies

Subjective discount rates have been used as measures of time preference to explain saving behavior, with varying results. There is also a lack of agreement between different explanatory models of subjective discount rates. In this paper, it is argued that a better understanding of subjective discoun...

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Bibliographic Details
Published inJournal of economic psychology Vol. 17; no. 6; pp. 709 - 730
Main Authors Wahlund, Richard, Gunnarsson, Jonas
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.12.1996
Elsevier
North-Holland Pub. Co
Elsevier Sequoia S.A
SeriesJournal of Economic Psychology
Subjects
Cognition
Cognitive processes
Consumer behavior
Consumers
Discount rates
Economic models
Financial management
Financial strategies
Propensity to save
Psychological aspects
Regression analysis
Research methods
Saving
Savings
Studies
Discount rates
Cognitive processes
D12
Financial strategies
2340
Saving
D91
3900
Research methods
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Summary:Subjective discount rates have been used as measures of time preference to explain saving behavior, with varying results. There is also a lack of agreement between different explanatory models of subjective discount rates. In this paper, it is argued that a better understanding of subjective discount rates can be reached by using groups with different financial strategies as domains. It is shown by PLS and regression analyses that the mental discounting process differs between groups practicing different financial strategies and that the explained variance of subjective discount rates and thus the understanding of such rates are improved by using financial strategy groups as domains.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0167-4870
1872-7719
DOI:10.1016/S0167-4870(96)00041-4