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Scaredy Cats to Cool Cats: How Time Perspective Matters in Attitude and Intent toward Financial Decisions

2014; Volume: 15; Issue: 3 Linguagem: Inglês

1533-3604

Marilyn Spencer, Valrie Chambers, Bilaye R. Benibo,

Leadership, Behavior, and Decision-Making Studies

ABSTRACTThe widely broadcast evidence of a looming economic downturn in late 2008, with a magnitude and length most of us had never before experienced, provided an unusual opportunity to measure the financial decisions of middle income, relatively well educated Americans in a time of financial crisis. The degree of devastation and even panic some scaredy cat individuals felt about their financial security and their financial future during the economic meltdown in the late summer and fall of 2008, and the continually higher unemployment rates until late 2010, surely affected decisions about saving and investing funds. This study utilizes the Zimbardo Time Perspective Index (ZTPI) developed by Zimbardo and Boyd (2008), to measure the influence of time perception on financial decisions in that very uncertain environment, while statistically correcting for demographic influences. Although numerous studies have attempted to explain what propels an individual's decisions concerning how much to spend or save, and how risk seeking or risk averse they are, none have utilized the psychology of time perspective. The two original issues examined in this study are (1) the intent to change jobs, and (2) the intent to move funds. As the recession lingered well beyond fall 2008, a refinement of the instrument was used to examine intentions concerning job changes. (Funds would likely already have been moved.) Using the ZTPI questions as a starting point, this study created and tested a second set of tailored questions that included 21 questions specific to time perspectives of financial issues, in an attempt to provide a more accurate picture of the influences of time perspective on the intent to change jobs. Then in late 2012, a third set of data was tested, using 60 modified-ZTPI items. By that time the economy had stabilized and unemployment was inching downward. Those results showed less predictability than when the job market was in crisis, indicating the return to a less emotional, cool cat decision-making process. However, taken together, these three sets of results indicate both the promise of time perspective on the intent to change jobs, and the usefulness of questions that more directly measure time perspective with regard to finances, in times of general financial crisis.Key words: time perspective, job, asset allocation, riskINTRODUCTIONNumerous studies have attempted to understand the factors that make some individuals more or less risk averse in building their investment portfolios, whether in normal times or in times of economic downturns. However, none of those studies have utilized the recently published Zimbardo Time Perspective Index (ZTPI) created by Philip Zimbardo of Stanford and John Boyd of Google (Zimbardo and Boyd, 2008), which is very persuasive in postulating that one's perspectives concerning past, present, and future have a major impact on financial decisions. The primary purpose of this study is to examine the effects of how an individual's perception of time determines that individual's attitudes and intended actions concerning job changes in times of national/global financial crises. The secondary purpose of this study is to test whether the standard scale items are more applicable than tailored scale items to this type of problem.Specifically, the study primarily seeks to learn whether any particular time perspectives have strong effects on an individual's intention to change jobs during this financial crisis. The timing was initially fortuitous for researchers, providing a large sample of respondents who were coping with major financial concerns. A secondary objective of this study is to determine whether a second set of scale items that includes questions that are more focused on attitudes toward finances may be a useful refinement of the ZTPI for financial decisions.This study first analyzed the responses to questionnaires distributed in the fall of 2008 through the spring of 2009, by which time most households, or their friends and extended family members, were feeling some effects of the worst worldwide recession since the Great Depression. …