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- Title
Individual and Institutional Factors Related to Low-Income Household Saving Behavior.
- Authors
Heckman, Stuart J.; Hanna, Sherman D.
- Abstract
This research sought to further understanding of factors related to low-income household saving behavior. Saving behavior, defined as whether a household spent less than income, was analyzed by applying institutional theory, which proposes that households' institutional environment has a substantial effect on financial decisions. Two logistic regression models were used to test the effects of variables on saving behavior; the first logit was based on the life cycle hypothesis and the second added noneconomic individual factors (i.e., social networks, financial literacy, and psychological variables) and institutional factors (i.e., access, incentives, and facilitation). Institutional factors, including the number of institutions used, credit access, and having an employer sponsored retirement plan, had significant effects even after controlling for the effect of variables based on the life cycle model, suggesting that promoting institutional access and facilitation--especially through employer-provided plans--may encourage saving behavior among low-income households.
- Subjects
POOR people's attitudes; LIFE cycle hypothesis (Economic theory); SAVINGS; LOGISTIC regression analysis; INSTITUTIONAL theory (Sociology)
- Publication
Journal of Financial Counseling & Planning, 2015, Vol 26, Issue 2, p187
- ISSN
1052-3073
- Publication type
Article
- DOI
10.1891/1052-3073.26.2.187