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Mattresses versus Banks - The Effect of Trust on Portfolio Composition

Tom Coupé

No 40, Discussion Papers from Kyiv School of Economics

Abstract: This paper adds to the growing literature that studies whether trust affects the financial decisions of people. More specifically, we investigate whether lack of trust in banks can explain why people save their savings in cash, ‘under the mattress’, rather than deposit their savings at the bank. We find a significant effect of lack of trust on the likelihood that a person saves money in cash but also that lack of trust can only provide part of the explanation for the ‘money under the mattress’ phenomenon. Other factors that matter are the financial awareness and access to bank services.

Keywords: trust; bank deposits; cash savings; financial awareness (search for similar items in EconPapers)
JEL-codes: G21 O16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cba and nep-cbe
Date: 2011-06
Note: Journal of Development Economics
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http://repec.kse.org.ua/pdf/KSE_dp40.pdf June 2011 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:kse:dpaper:40

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