Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250320 
Year of Publication: 
2020
Series/Report no.: 
Cardiff Economics Working Papers No. E2020/10
Publisher: 
Cardiff University, Cardiff Business School, Cardiff
Abstract: 
We study the relationship between saving choices and a key psychological characteristic such as locus of control using data from a longitudinal survey representative of the Dutch population. Locus of control measures the extent to which individuals perceive their life outcomes to be determined by their own actions, as opposed to external factors. Our findings show that those who believe to be in control of future outcomes save more, both at the extensive(probability to save) and intensive margins (amount of savings). We also investigate the mechanisms behind the relationship. Locus of control may affect both the propensity to save for general purposes and savings to achieve a specific purchase goal (e.g.buying a house). We find that both channels are significant, the latter being more sizeable.
Subjects: 
Locus of Control
Saving decisions
Propensity to save
Mediation analysis
JEL: 
D14
D91
Document Type: 
Working Paper

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