Influence of the Consideration of Future Consequences on Financial Behavior: The Case of Japanese Individual Investors

Toru Suehiro, Koichi Takeda, Takashi Kozu and Toshihiko Takemura

Journal of Economics and Behavioral Studies, 2019, vol. 11, issue 4, 54-60

Abstract: We analyze the impact of the “consideration of future consequences” (CFC) on the amount of financial assets and the liabilities of individual investors by applying a Tobit model to data from a web-based survey. We find that impatient individuals with high CFC have fewer deposits and financial asset balances. We also examine the influence of the CFC-immediate (CFC-I) and CFC-future (CFC-F) sub-indicators often used in psychology as well as CFC on financial asset balances and liabilities. CFC-I show concern with immediate consequences and also an index related to ego depletion. We find that the higher the CFC-I, the lower the amount of deposits and financial asset balances. However, CFC-F is a sub-indicator designating lack of concern with future consequences; thus, the higher the CFC-F, the larger the debt.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:rnd:arjebs:v:11:y:2019:i:4:p:54-60

DOI: 10.22610/jebs.v11i4(J).2920

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