Control Thyself: Self-Control Failure and Household Wealth

SAFE Working Paper No. 69

39 Pages Posted: 13 Oct 2014

See all articles by Nina Biljanovska

Nina Biljanovska

International Monetary Fund (IMF)

Spyros Palligkinis

European Central Bank (ECB)

Multiple version iconThere are 2 versions of this paper

Date Written: October 9, 2014

Abstract

We examine the relationship between household wealth and self-control. Although self-control has been linked to consumption and financial behavior, its measurement remains an open issue. We employ a definition of self-control failure that follows literature in psychology, suggesting that three factors can render self-control defective: lack of planning, lack of monitoring, and lack of commitment to pre-set plans. Our measure combines those three ingredients and can be computed using a standard representative survey. We find that self-control failure is strongly associated with different household net wealth measures and with self-assessed financial distress.

Keywords: Self-Control, Household Wealth, Household Finance

JEL Classification: D01, D12, D14

Suggested Citation

Biljanovska, Nina and Palligkinis, Spyros, Control Thyself: Self-Control Failure and Household Wealth (October 9, 2014). SAFE Working Paper No. 69. Available at SSRN: https://ssrn.com/abstract=2509080 or http://dx.doi.org/10.2139/ssrn.2509080

Nina Biljanovska

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Spyros Palligkinis (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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