Financial Responsibility, Personality Traits and Financial Decision ...

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2 Data We use data from the 2011 Dutch National Bank Household Survey (DHS). DHS is a long-standing, annual household survey that includes extensive information about demographic and economic household characteristics, focusing on wealth and savings data. The data set is representative of the Dutch population, and it contains over 2,000 households. The DHS is built up in several sections. Section A inquires about the financial background of the respondent (i.e., income, savings, spending behavior, etc.). Section B focuses on whether households rely on external advice for their financial matters. Section C deals with the pension plan of the household, while section D asks questions with respect to housing and mortgage details. In addition to using data from the core of the DHS, we also use data from additional, self-designed survey modules on financial literacy and saving behavior, added to the survey in April 2011. This final section of the survey is designed to assess ability of households to properly make financial decisions and to trade off long-term benefits with short-term investments. Our dataset also benefits from existing survey data and background characteristics on the panel, enriching our survey results with additional background items that were addressed in other DHS surveys over 2011. The most important set of items here, is a set of 13 locus of financial control questions that is part of the regular assets and loans section of DHS and that has been validated in earlier studies . The first seven questions are designed to measure the internal locus of control. Averaging the scores on these questions results in a construct for the belief that one determines ones own economic fate. The remaining 6 questions measure the belief that chance determines ones economic fate, hence are averaged in what we refer to as the chance construct. See Furnham (1986) for an overview of the approach. 8
In total, the survey consists of 62 questions, and requires 18 minutes to complete, on average. Survey participants are interviewed via the Internet. A total of 1,721 out of 2,028 households completed the financial literacy module – a response rate of 84.9 percent (in line with the response rate for the main survey). Table 1 reports summary statistics of the main variables of our survey. Here we report items in four clusters, representing the life-cycle and personality of the respondents; variables relating to the household demographics (section A), variables related to their youth and upbringing (section B), variables related to their education, skills, and interests (section C), and variables related to their personality and attitude (section D). In section E, we report statistics on the respondents savings behavior. The variables of section A are most common in the literature on financial literacy and education. In the cluster of youth and upbringing, we seek for effects that parents may have had on the savings behavior (while controlling for generational effects) of their offspring. In the third cluster we group variables that indicate the skills of the respondent, which are partly trained by education and partly developed by personal interests. Here, we also include the financial literacy construct of Lusardi and Mitchell (2007). In section E, we group variables that are inspired by the behavioral psychology literature. Here we test whether saving behavior coincides with personality features like optimism, being organized, and a strong locus of control. The statistics in Table 1 are presented for the full sample of 1,721 respondents, and for two sub groups the spenders versus the savers. We define these sub groups based on the respondents reply to the question that measures the extent to which they are willing to sacrifice immediate wellbeing to achieve future results. Savers are the group that scores high on this question, while the reverse is true for spenders. 9
Page 1 and 2: Financial Responsibility, Personali
Page 3 and 4: decisions through their understandi
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Page 11 and 12: e good at mathematics, and merely 1
Page 13 and 14: looked at in detail later, and is o
Page 15 and 16: striking are the low scores that we
Page 17 and 18: these two household demographics re
Page 19 and 20: savers, the only interaction effect
Page 21 and 22: References [1] Berman, A. and T. Ha
Page 23 and 24: [19] Modigliani, F., Brumberg,R., 1
Page 25 and 26: Table 1: Summary statistics Total s
Page 27 and 28: Table 3: Robustness test of savings
Page 29 and 30: Table 5: Logit regressions on obser
Page 31 and 32: % Savers 60 50 40 30 20 10 0 Male F
Page 33 and 34: - It is hard to find a good financi
Page 35 and 36: C Financial Literacy Mean Stdev Min
Page 37 and 38: 100% 80% 60% 40% 20% 0% > 1960 1945

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