A meta‐analytic investigation of consumer over‐indebtedness: The role of impulsivity

Abstract

In the past decade, evidence has been accumulated on the relationship between impulsivity and over‐indebtedness. Nevertheless, the magnitude of such association is still considered marginal compared to traditional socio‐demographic and economic factors, with the important consequence that impulsivity continues to be ignored in policy interventions for preventing and dealing with over‐indebtedness. The aim of this study was to meta‐analyse existing studies to answer the question: Are higher levels of impulsivity associated with greater over‐indebtedness? Scopus and Web of Science databases were searched for English language studies. Seventeen studies were eligible for the analysis. The random effect model yielded a significant positive association between impulsivity and over‐indebtedness (Hedges' g = .40). Type of over‐indebtedness (debt holding vs. unmanageable debt) and work status (percentage of employed individuals) significantly moderated this association. Results are discussed in terms of implications and recommendations for future research, policy and practice.

Debt and Overindebtedness: Psychological Evidence and its Policy Implications

“…A recent meta‐analysis by Frigerio et al. (2020) confirms that this trend is general, though it also shows that the result is moderated by the level of debt and the employment status of the respondents.…”

“…The general finding is that higher impulsiveness is indeed correlated with debt (e.g., Achtziger et al, 2015;Gathergood & Weber, 2014;Ottaviani & Vandone, 2011;Peltier et al, 2016). A recent meta-analysis by Frigerio et al (2020) confirms that this trend is general, though it also shows that the result is moderated by the level of debt and the employment status of the respondents.…”

“…Nonetheless, Frigerio et al. (2020) suggest that the persistent association between high impulsiveness and debt problems does have policy implications: they argue for laying a greater duty of care on lenders towards impulsive borrowers. That is reasonable, and this consideration is addressed in Recommendation 5, below, alongside other sources of individual vulnerability to debt problems.…”

Financial literacy, money management skill and credit card repayments

“…Kacen and Lee (2012) define impulsive spending as the temptation to engage in an unplanned purchasing behaviour that is characterised by fast and immediate decision making as opposed to planned purchasing behaviour. Frigerio, Ottaviani, and Vandone (2020) find that impulsiveness is associated with over‐indebtedness. Badgaiyan and Verma (2015) confirm that credit card use encourages impulsive buying behaviour.…”

Perceived Causes and Attitudes Regarding Overindebtedness and Their Effects on Public Agreement With Government Financial Aid

“…Impulsive consumerism and lack of self-control have also been associated to excessive levels of accumulated debt, with impulsive consumers showing more hyperbolic discounting and lower tolerance to delayed gratification (Vohs and Heatherton, 2000;Vohs and Faber, 2007;Gathergood, 2012). This relationship between impulsivity and over-indebtedness was recently confirmed in a meta-analysis conducted by Frigerio et al (2020). Specifically, impulsivity was more strongly associated with unmanageable debt (i.e., overindebtedness) compared to (manageable) debt holding.…”