The perception of self‐efficacy in coping with economic risks among young adults: an application of psychological theory and research

Engelberg, Elisabeth

doi:10.1111/j.1470-6431.2005.00494.x

Cited by 48 publications

(35 citation statements)

References 37 publications

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“…Similar to PSO and money management skills, financial self‐efficacy was a further mediator of the relationship of financial vulnerability with several financial outcomes, supporting previous findings linking this characteristic with savings (Engelberg ) and investment behaviors (Dulebohn and Murray ), as well as the use of credit (Tokunaga ). More indebted individuals typically experience poorer psychological health, and higher stress levels (e.g., Gathergood ).…”

Section: Discussionsupporting

confidence: 81%

How Does Consumers' Financial Vulnerability Relate to Positive and Negative Financial Outcomes? The Mediating Role of Individual Psychological Characteristics

Hoffmann¹,

McNair²

2018

Journal of Consumer Affairs

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Vulnerable consumers are at particular risk of financial detriment due to, for example, low financial literacy or numeracy, high debt, low income, or impactful changes in personal circumstances. We introduce a comprehensive and formative measure of financial vulnerability that integrates these risk factors and is grounded in definitions of vulnerability from financial regulation bodies and government agencies such as the Consumer Financial Protection Bureau. Across three studies of US individuals, we assess the nomological validity of this measure of financial vulnerability through its relationship with positive and negative financial outcomes (e.g., savings levels, paying credit card balances in full each month, being in arrears) as well as relevant psychological characteristics (e.g., personal savings orientation [PSO], money management skills, financial self‐efficacy). Moreover, we examine whether and how these psychological characteristics mediate the relationship between financial vulnerability and financial outcomes. We conclude with an overview of implications for policy makers and business practitioners.

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Section: Discussionsupporting

confidence: 81%

How Does Consumers' Financial Vulnerability Relate to Positive and Negative Financial Outcomes? The Mediating Role of Individual Psychological Characteristics

Hoffmann¹,

McNair²

2018

Journal of Consumer Affairs

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“…Therefore, researchers have begun to test broader financial self-efficacy measures that go beyond a one-item measure of subjective financial knowledge. Findings from studies that make use of comprehensive financial self-efficacy scales confirm that financial self-efficacy is separately identifiable from financial knowledge and contributes significantly to predicting financial behaviour (Engelberg, 2007;Farrell et al, 2016;Rothwell et al, 2016). Studies that focus on understanding the role played by financial capability should therefore consider not only financial knowledge and skill but also the confidence of the decision maker, as measured by the individual's financial self-efficacy.…”

Section: Re Vie W Of Liter Aturementioning

confidence: 88%

Financial capability and emergency savings among South Africans living above and below the poverty line

Reyers

2019

Int J Consumer Studies

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Emergency savings provide a buffer against financial shocks, particularly among low‐income households. Despite the importance of these funds in lessening financial hardship, many households have not set aside emergency funds. It has been suggested that financial capability may play a role in financial behaviour. Therefore, this study considers whether financial capability is associated with saving for emergencies and whether there are differences in factors that predict emergency savings behaviour among those living below and above the poverty line. Using data from a sample of South Africans, logistic regression is used to determine the predictors of emergency savings. The study finds that those with higher levels of financial capability, related to financial self‐efficacy and having access to a bank account, are more likely to have emergency savings compared with those with lower levels of financial capability. However, no evidence is found to suggest a relationship between objectively measured financial knowledge and emergency savings. Therefore, the findings suggest that self‐assessed financial ability, as measured by financial self‐efficacy, might be more important than objectively assessed ability in the context of individuals making responsible financial choices. Differences in the predictors of emergency savings for those living above and below the poverty line related to socioeconomic and demographic differences, whereas the same financial capability predictors were significant predictors in both samples. The study provides unique insights into the predictors of emergency savings in a developing market context and identifies the characteristics of those who are likely to be financially resilient to unexpected economic shocks. The importance of the broader financial capability construct in predicting emergency savings, for both those living above and below the poverty line, suggests that programmes aimed at encouraging emergency savings should focus on enhancing financial self‐efficacy and financial inclusion.

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“…The former regards the active ways in which an individual mobilize resources to face and remedy a harmful situation, while the later comprehends the most passive forms to emotionally accept and minimize a stressful situation (Carver & Connor‐Smith, ; Holahan & Moos, ; Kohn, ). The more resourceful an individual is, the more able she or he will be to engage in active coping (Holahan & Moos, ) to overcome a variety of harmful situations, such as economic (Engelberg, ; Joshi & Gandotra, ) and market constraints (Bingen et al, ).…”

Section: Introductionmentioning

confidence: 99%

“…The more resourceful an individual is, the more able she or he will be to engage in active coping (Holahan & Moos, 1987) to overcome a variety of harmful situations, such as economic (Engelberg, 2007;Joshi & Gandotra, 2006) and market constraints (Bingen et al, 2011).…”

Section: Introductionmentioning

confidence: 99%

Consumption, crisis, and coping strategies of lower class families in Brazil: A sociological account

Castilhos

Fonseca

Bavaresco

2017

Int J Consumer Studies

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Extant research on the dispositional dimensions of coping strategies emphasizes the personality determinants behind the different ways through which individuals seek to tolerate, minimize, and overcome stressful situations. We offer a sociological complement to this perspective. To do so, we conducted a qualitative inquiry of Brazilian new middle‐class consumers who are facing the current economic crisis after having experienced more than a decade of expansion in consumption. We identify five sets of coping strategies through which consumers minimize the effects of the crisis and remain invested in consumer culture. We also demonstrate how such strategies are differently informed by dispositional elements that stem from primary and secondary socializations. We contribute to a sociological account of the shaping of the cognitive, emotional, and social resources individuals deploy to cope with the crisis as well as with an empirical account of the lived effects of current Brazilian crisis.

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The perception of self‐efficacy in coping with economic risks among young adults: an application of psychological theory and research

Cited by 48 publications

References 37 publications

How Does Consumers' Financial Vulnerability Relate to Positive and Negative Financial Outcomes? The Mediating Role of Individual Psychological Characteristics

How Does Consumers' Financial Vulnerability Relate to Positive and Negative Financial Outcomes? The Mediating Role of Individual Psychological Characteristics

Financial capability and emergency savings among South Africans living above and below the poverty line

Consumption, crisis, and coping strategies of lower class families in Brazil: A sociological account

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