Present Bias and Financial Behavior

Posted: 12 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: July 23, 2019

Abstract

Present bias is an important term in the theory of self‐control in behavioral finance. Empirical research finds that present bias is associated with undesirable spending, borrowing, and saving behaviors. 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: 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 in the present and less likely to save for the future. The findings have implications for further research on present bias and help researchers better understand this important concept. The results are also informative for financial planners to better serve their clients.

Full Text Available Here: https://doi.org/10.1002/cfp2.1048

Suggested Citation

Xiao, Jing Jian and Porto, Nilton, Present Bias and Financial Behavior (July 23, 2019). Financial Planning Review, Vol. 2, Issue 2, June 2019. Available at SSRN: https://ssrn.com/abstract=3485715

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)

HOME PAGE: http://www.uri.edu/hss/hdf/faculty/JingJXiao.htm

Nilton Porto

University of Rhode Island ( email )

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

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