Control Thyself: Self-Control Failure and Household Wealth
SAFE Working Paper No. 69
39 Pages Posted: 13 Oct 2014
Date Written: October 9, 2014
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: Suggested Citation