Mediating Role of Mental Accounting in between Financial Cognition and Personal Financial Planning of Indian Households

25 Pages Posted: 1 Oct 2018

See all articles by Mousumi Mahapatra

Mousumi Mahapatra

Institute of Public Enterprise (IPE)

Jayasree Raveendran

TCS Innovation Labs

Anupam De

National Institute of Technology (NIT), Durgapur

Date Written: September 30, 2018

Abstract

Financial decisions are the most important and life-shaping decisions individual make in their life. The increasing body of literature evidences the role of the individual psychological influence in their financial decisions. More specifically, the role of mental accounting is established in the domain of individual behavior towards money and financial matters. The present study also explores the influence of cognitive components on individual financial decision making and named the antecedent as financial cognition. The study hypothesizes a significant association of financial cognition on mental accounting process and on personal financial planning of Indian households and also hypothesizes mediating role of mental accounting. Study uses partial least square structural equation modeling in SmartPLS 3.0, to analyze the data of 310 responses. The hypothesized relationships are established and a partial mediating role of mental accounting in between financial cognition and mental accounting process of Indian households is evidenced.

Keywords: Mental Accounting, Financial Cognition, Personal Financial Planning, Indian Households, Structural Equation Model

Suggested Citation

Mahapatra, Mousumi and Raveendran, Jayasree and De, Anupam, Mediating Role of Mental Accounting in between Financial Cognition and Personal Financial Planning of Indian Households (September 30, 2018). 2019 Academic Research Colloquium for Financial Planning and Related Disciplines. Available at SSRN: https://ssrn.com/abstract=3257860 or http://dx.doi.org/10.2139/ssrn.3257860

Mousumi Mahapatra (Contact Author)

Institute of Public Enterprise (IPE) ( email )

Shamirpet
Telangana
Hyderabad, Tamil Nadu 500101
India

Jayasree Raveendran

TCS Innovation Labs ( email )

Hyderabad
India

Anupam De

National Institute of Technology (NIT), Durgapur ( email )

M.G. Avenue
Durgapur, West Bengal 713209
India

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