Present Bias and Financial Behavior

30 Pages Posted: 6 Nov 2019

See all articles by Jing Jian Xiao

Jing Jian Xiao

University of Rhode Island

Nilton Porto

University of Rhode Island

Multiple version iconThere are 2 versions of this paper

Date Written: September 28, 2018


Present bias is an important term in behavioral finance that is derived from the concept of self-control. Empirical research finds that present bias is associated with undesirable spending, borrowing, and saving behavior. Unlike previous research that focuses on one domain of financial behavior, the purpose of this study is to examine associations between present bias and a set of financial behaviors in various domains such as spending, borrowing, saving, and money management. With data from a national urban sample in China, results show that some behavioral patterns are consistent with theoretical predictions that present biased consumers are more likely to spend now and less likely to save. The findings have implications for further research of present bias to better understand this important concept and for financial advisors to better serve their clients.

Keywords: present bias, self control, behavioral finance, financial behavior

JEL Classification: D12, D14, D91

Suggested Citation

Xiao, Jing Jian and Porto, Nilton, Present Bias and Financial Behavior (September 28, 2018). 2019 Academic Research Colloquium for Financial Planning and Related Disciplines. Available at SSRN: or

Jing Jian Xiao (Contact Author)

University of Rhode Island ( email )

Transition Center
Kingston, RI 02881
United States
401-874-2547 (Phone)
401-874-4020 (Fax)


Nilton Porto

University of Rhode Island ( email )

Kingston, RI 02881
United States
401-874-7135 (Phone)
401-874-4020 (Fax)

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