Modeling Deposit-Withdrawal Behavior from the Perspective of Risk Tolerance

Abstract

In this study, we model individual’s withdrawal behavior with risk tolerance. By analyzing our model, it is found the followings: 1) effects of psychological factors such as degree of trust in information sources and degree of risk aversion are not uniformly against individual’s deposit-withdrawal behavior. 2) the probability that they carelessly withdraw their deposits tends to be lower if individuals correctly understand Japanese deposit insurance scheme. 3) annual income affects individual’s deposit-withdrawal behavior, but total amount of his/her deposit and the number of accounting do not affect it. In addition, we propose that the government and/or financial institutes implement the measure which promotes to let understand Japanese deposit insurance scheme to depositors.

Keywords: Risk Tolerance, Withdrawal Behavior, Understanding of Japanese Deposit Insurance Scheme, Stepwise Ordered Logit Regression