Locus of Control, Saving and Propensity to Save

Alessandro Bucciol and Serena Trucchi

No 06/2020, Working Papers from University of Verona, Department of Economics

Abstract: We study the relationship between (internal and external) locus of control and saving choices using data from a longitudinal household survey representative of the Dutch population. Our findings show that individuals with more internal locus of control and less external locus of control save more, both at the extensive (probability to save) and intensive margins (amount of saving). We also investigate the mechanisms behind the relationship, assessing the role of propensity to save as a mediator. This way the effects on saving of internal and external locus can be split in direct and indirect components; the latter, which is found to be significant although less sizeable than the direct component, means that locus of control has an impact on the propensity to save which, in turn, affects saving.

Keywords: Locus of Control; Saving decisions; Propensity to Save; Mediation analysis. (search for similar items in EconPapers)
JEL-codes: D14 D91 (search for similar items in EconPapers)
Pages: 26
Date: 2020-04
New Economics Papers: this item is included in nep-cbe, nep-eur and nep-neu
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Working Paper: Locus of Control, Savings and Propensity to Save (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ver:wpaper:06/2020

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