Fatalism and Savings

Stephen Wu and Joel Shapiro

MPRA Paper from University Library of Munich, Germany

Abstract: We examine the impact of fatalism, the belief that one has little or no control over future events, on the decision of whether or not to save. We develop a model that predicts that fatalism decreases savings for moderately risk averse individuals, increases savings for highly risk averse individuals, and otherwise has no impact. Furthermore, fatalism decreases effort in learning about savings and investment options. We use data from National Longitudinal Survey of Youth (NLSY) and find general support for the theoretical predictions of the model. The results are robust to the inclusion of a number of additional control variables.

Keywords: fatalism; savings; risk aversion (search for similar items in EconPapers)
JEL-codes: D80 H00 (search for similar items in EconPapers)
Date: 2010-07
New Economics Papers: this item is included in nep-cbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Fatalism and savings (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:24852

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