Perceived Precautionary Savings Motives: Evidence from FinTech

64 Pages Posted: 6 Dec 2019 Last revised: 12 Jun 2020

See all articles by Francesco D'Acunto

Francesco D'Acunto

Boston College

Thomas Rauter

University of Chicago - Booth School of Business

Christoph Scheuch

Vienna Graduate School of Finance (VGSF); WU (Vienna University of Economics and Business)

Michael Weber

University of Chicago - Finance; CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Multiple version iconThere are 3 versions of this paper

Date Written: June 2020

Abstract

In a representative sample of new borrowers, access to lines of credit increases the spending of more liquid households permanently. Liquid consumers reduce their existing savings but do not tap into negative deposits, and hence do not raise debt. Through our FinTech bank setting, we elicit consumers' risk preferences, beliefs, perceptions, and other characteristics directly. No proxies for precautionary savings motives differ systematically across liquid and illiquid consumers. Liquid consumers appear to have higher subjective beliefs about precautionary savings, despite no different objective characteristics. Our results have implication for the transmission of policy to households through bank credit.

Keywords: Digital Banking, Beliefs, Household Finance, Consumption Credit, Savings, 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 FinTech (June 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

Vienna Graduate School of Finance (VGSF) ( email )

Welthandelsplatz 1
Vienna, A-1020
Austria

HOME PAGE: http://christophscheuch.github.io/

WU (Vienna University of Economics and Business) ( email )

Welthandelsplatz 1
Vienna, A-1020
Austria

HOME PAGE: http://bach.wu.ac.at/d/research/ma/14198/

Michael Weber

University of Chicago - Finance ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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