Perceived Precautionary Savings Motives: Evidence from Digital Banking

68 Pages Posted: 6 Dec 2019 Last revised: 22 Dec 2020

See all articles by Francesco D'Acunto

Francesco D'Acunto

Boston College

Thomas Rauter

University of Chicago - Booth School of Business

Christoph Scheuch

wikifolio Financial Technologies AG

Michael Weber

University of Chicago - Finance; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: December 21, 2020

Abstract

In a representative sample of new borrowers, access to digital lines of credit increases the spending of consumers with ex-ante higher savings rates (liquid consumers) permanently. After access to the line of credit, these consumers reduce their existing savings rate but do not tap into negative deposits and hence do not raise debt. Through our FinTech bank setting, we can elicit consumers' risk preferences, beliefs, perceptions, and other characteristics directly. Common theoretical determinants of precautionary savings motives do not differ systematically across liquid and illiquid consumers but liquid consumers have higher subjective beliefs about the need for precautionary savings nonetheless.

Keywords: Digital Footprint, Beliefs, Bank Credit, Household Finance, Behavioral Finance

JEL Classification: D14, E21, E51, G21

Suggested Citation

D'Acunto, Francesco and Rauter, Thomas and Scheuch, Christoph and Weber, Michael, Perceived Precautionary Savings Motives: Evidence from Digital Banking (December 21, 2020). Chicago Booth Research Paper No. 19-26, Fama-Miller Working Paper, University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2019-140, Available at SSRN: https://ssrn.com/abstract=3499013 or http://dx.doi.org/10.2139/ssrn.3499013

Francesco D'Acunto

Boston College ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

Thomas Rauter (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Christoph Scheuch

wikifolio Financial Technologies AG ( email )

Berggasse 31
Vienna, 1090
Austria

Michael Weber

University of Chicago - Finance ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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