Determinants of financial worry

Magwegwe, Frank; MacDonald, Maurice; Lim, HanNa; Heckman, Stuart J.

doi:10.1111/joca.12496

Cited by 6 publications

(5 citation statements)

References 98 publications

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“…Subject 6 [female, 41] This type of concern can affect decision making. The lack of either subjective financial knowledge (or financial goal self-efficacy) and self-confidence increases financial worry (Magwegwe, 2020), and this subjective dimension affects the objective financial situation (O'Connor et al, 2019). This profile could be denoted as "unconfident".…”

Section: Resultsmentioning

confidence: 99%

Affective and cognitive factors that hinder the banking relationships of economically vulnerable consumers

González

Fernández–Olit

Orenes

et al. 2022

IJBM

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PurposeThe aim of this paper is to explore the affective and cognitive factors that condition banking relationships for economically vulnerable consumers and how these factors contribute to increasing financial difficulties and exclusion. This research, performed on a set of focus groups, bases its findings on a combination of experimental and discourse analysis methods.Design/methodology/approachFinancial decisions are not rational and can be biased by affective and cognitive factors. Behavioural finance has focused very little on analysing how consumer biases influence relationships with banking institutions. Additionally, these relationships are affected by the digitalization and transformation of banking business. Thus, in the case of economically vulnerable consumers, who are not profitable for the increasingly competitive banking industry and lack financial abilities, their risk of financial exclusion is increasing.FindingsThe results show that distrust and shame lead to financial difficulties in economically vulnerable consumers. Distrust generates problems of access and self-exclusion, while shame generates difficulties of use. This lack of trust makes them more rational when dealing with machines than with people, showing greater banking difficulties for consumers with a “person-suspicious” profile.Originality/valueThis finding can help regulators establish limits on banking behaviour, require banks to incorporate affective and cognitive factors in their convenience tests and detect new variables that can help them improve their insolvency ratios and reputations.

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Section: Resultsmentioning

confidence: 99%

Affective and cognitive factors that hinder the banking relationships of economically vulnerable consumers

González

Fernández–Olit

Orenes

et al. 2022

IJBM

View full text Add to dashboard Cite

show abstract

“…The threat‐induced disruptions have permeated every aspect of consumers' lives, potentially affecting their overall well‐being. As a result, addressing and understanding consumer well‐being concerns in the face of such threats has become an integral component of contemporary marketing research (Campbell et al, 2020; Magwegwe et al, 2023; Pradhan, 2022). Previous studies have found disease cues could increase individuals' perception of uncertainty and feelings of loss of control, leading to various irrational consumption behaviors (Fiorillo & Gorwood, 2020; Jiao et al, 2022; Singh et al, 2023).…”

Section: Discussionmentioning

confidence: 99%

Does survival threat make us irrational? The effects of disease cues on sunk cost bias

Sun,

Chen,

Guo

2024

Journal of Consumer Affairs

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Sunk cost bias is a pervasive issue in the real world, manifesting in various domains, such as consumption and investment, influencing consumer well‐being. This bias often leads to a misallocation of resources towards less meaningful activities. In the current study, we explored a novel factor, specifically disease cues, that influences the sunk cost bias. Through a survey and four systematic experiments, using both lab and natural manipulations of disease cues, we demonstrate that disease cues encourage individuals to overvalue their prior investments, leading to an increased propensity for sunk cost bias in imagined decision scenarios and real choices. We have also ruled out alternative explanations for our findings. Significantly, we added a survey to directly explore the sunk cost bias and consumer subjective well‐being, showing a significant positive relationship between them. Our research contributes to understanding consumer irrational behavior and aims to improve consumer well‐being.

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“…The sample was primarily White, married or common-law, and not limited to people who are struggling financially. Participants reported a range of different financial situations and income, which was the reason we focused on the subjective experience of financial worry, which can be present at any income level ( de Bruijn & Antonides, 2020 ; Johar et al, 2015 ; Magwegwe et al, 2023 ). It is notable that actual income or even income regularity was not associated with perceived behaviors in either study.…”

Section: Discussionmentioning

confidence: 99%

“…We define financial worry as repeated negative thinking about one’s financial situation ( de Bruijn & Antonides, 2020 ), including both negative emotions such as anger, being upset or anxious about finances and negative cognitions such as repeated and interfering thoughts about one’s financial situation. Although subjective financial stress and worry about finances can be found at any income level, they have been linked to objective financial stressors such as income or income volatility, with people at the lower end of the income distribution being more prone to worry and ruminate about finances ( Johar et al, 2015 ; Magwegwe et al, 2023 ).…”

Section: Introductionmentioning

confidence: 99%

How individuals perceive their partner’s relationship behaviors when worrying about finances

Peetz,

Fisher-Skau,

Joel

2024

Journal of Social and Personal Relationships

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What role do financial worries play in close relationship functioning? In this research, we examine how financial worry – negative thoughts and feelings about finances – is associated with perceived relationship behaviors. Participants recalled how their partner acted during a recent disagreement (Study 1, N = 97 couples) or recalled the frequency of positive and negative behaviors enacted by their partner during the previous week (Study 2, N = 99 couples). Feeling more worried about finances was associated with recalling less supportive behavior from one’s partner at the disagreement (Study 1) and with perceiving more negative behaviors from one’s partner in the last week (Study 2). Truth and Bias Model analyses suggest that part of this link may be attributed to biased perceptions, as the link between financial worry and perceiving more negative behaviors persisted even after controlling for participants’ own reported behaviors (i.e., accounting for similarity) and for their partner’s own reported behaviors (i.e., accounting for accurate perceptions). In sum, financial worry is linked to how partners notice and interpret a loved one’s actions within their relationship.

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Determinants of financial worry

Cited by 6 publications

References 98 publications

Affective and cognitive factors that hinder the banking relationships of economically vulnerable consumers

Affective and cognitive factors that hinder the banking relationships of economically vulnerable consumers

Does survival threat make us irrational? The effects of disease cues on sunk cost bias

How individuals perceive their partner’s relationship behaviors when worrying about finances

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