The Ant and the Grasshopper: Understanding Personal Saving Orientation of Consumers

53 Pages Posted: 22 Dec 2015

See all articles by Utpal M. Dholakia

Utpal M. Dholakia

Rice University - Jesse H. Jones Graduate School of Business

Leona Tam

University of Wollongong - School of Management, Operations and Marketing

Sunyee Yoon

SUNY - Buffalo

Nancy Wong

University of Wisconsin - Madison - School of Human Ecology

Date Written: December 21, 2015

Abstract

A low savings rate is a persistent social issue with significant present and future ramifications. As an alternative to conceptualizing saving money as goal-directed behavior, the present research examines the chronic tendencies of people to save money in a consistent and sustained manner through a Personal Saving Orientation (PSO). Drawing upon theorizing on action control and research on forming and maintaining habits, the PSO emphasizes consistent, sustainable saving activities and incorporating them into one’s lifestyle. In a set of nine studies, the PSO scale is developed and its nomological, test-retest, discriminant, and predictive validities are established. The results also show that the PSO moderates the relationship between consumers’ financial knowledge and their accumulated savings. Additionally, low-PSO consumers are responsive to an intervention to help them save money. The PSO construct offers an effective method for understanding differences between consumers in their financial decision making and behaviors, and can be used as a guide to encourage consistent and sustained saving practices.

Keywords: Saving Money, Financial Decision Making, Financial Well-being, Consumer Trait

Suggested Citation

Dholakia, Utpal M. and Tam, Leona and Yoon, Sunyee and Wong, Nancy, The Ant and the Grasshopper: Understanding Personal Saving Orientation of Consumers (December 21, 2015). Available at SSRN: https://ssrn.com/abstract=2706943 or http://dx.doi.org/10.2139/ssrn.2706943

Utpal M. Dholakia (Contact Author)

Rice University - Jesse H. Jones Graduate School of Business ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States

Leona Tam

University of Wollongong - School of Management, Operations and Marketing ( email )

Building 40
Northfields Avenue
Wollongong, 2522
Australia

Sunyee Yoon

SUNY - Buffalo ( email )

Jacobs Management Center
Buffalo, NY 14051
United States

Nancy Wong

University of Wisconsin - Madison - School of Human Ecology ( email )

1225 Observatory Drive
Madison, WI 53706
United States

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