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The relationships between status quo bias and psychological
characteristics: From the viewpoint of consumption
behavior of over-indebtors
The relationships between status quo bias and psychological characteristics: From the viewpoint of consumption behavior of over-indebtors
Mina Shimada
Waseda University
Before the revision of money lending business law, seven largest consumer finance companies developed the consumption behavior and household budget management diagnosis services in order to enhance the soundness of the consumer finance market. From the perspectives of psychology and behavioral economics, I investigate psychological characteristics, consumption behavior, and household budget management for people who use this internet-based diagnostic tools administered by the Japan Financial Services Association.
The results show that the over-indebtors have, as their psychological characteristics, lower self-control power, self-planning skill, tendency of mature thought, management consciousness to life and money while they have higher tendency of impulsivity and feeling of satisfaction. Also, while they have a sense of monetary failures, they show a very low sense of resistance for borrowing money, and lack money management skills.
From the viewpoint of status quo bias, since they attach a high value to savoring a feeling of satisfaction of present consumption, they borrow money and repay over and over again. Their self-control function is imperfect. Also, I found several factors which increase their debt: The over-indebtors prefer an easy access to credit, and attach a low value to the future consumption.