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Individual behaviour and long-range planning attitude

2015; Taylor & Francis; Volume: 23; Issue: 5 Linguagem: Inglês

10.1080/1351847x.2014.1003313

1466-4364

Barbara Alemanni, Caterina Lucarelli,

Psychological Well-being and Life Satisfaction

AbstractDeclining welfare systems increase the importance of self-determination in pension decisions. Thus, the stability of long-life consumption markedly relies on individual long-range planning attitude. Our paper investigates how behavioural traits affect this attitude and influence the probability of holding voluntary integrative pension schemes (VIPS). We find that psychophysiological heterogeneity plays a role in predicting demand for VIPS, together with saving/indebtedness style and conventional sociodemographic characteristics. Specifically, individuals who have a high degree of non-planning impulsiveness, and who are inclined to intense psychophysiological arousals, are less likely to demand VIPS. Our results imply that behavioural individualities might prompt individuals to postpone, or even neglect, decisions necessary to maintain stable lifestyles in the long range.Keywords: long-range planning attitudepsychophysiological heterogeneityintegrative pension schemesimpulsivitySkin Conductance ResponseJEL Classification: G02G28D14D87 AcknowledgementsThis research was supported by a grant from the Italian Ministry of University and Research as a 'Research of National Interest' – PRIN 2007 (September 2008–September 2010). An incremental grant from ASSORETI (the Italian Association of Financial Advisors) allowed to enrich the sample of further 200 individuals (Year 2010–2011). We are grateful to Terrance Odean and Simone Ceccarelli (COVIP) for helpful comments and suggestions on preliminary versions of the paper. Moreover, we are thankful to seminar participants of the Behavioural Finance Working Group Conference, held at Queen Mary University of London, and an anonymous referee for valuable comments and suggestions on a preliminary version of this paper. We also thank the whole research group involved in running experiments: Gianni Brighetti, Nicoletta Marinelli, Camilla Mazzoli, Cristina Ottaviani, Valeria Nucifora, Rosita Borlimi, Giulio Palomba, Elisa Gabbi, Arianna Rizzoli, Sara Falcioni, Andrea Galentino and Irene Bellodi. For the first stage of analysis (PRIN 2007), we are grateful to all institutions that allowed us to run experiments on their customers and employees: Borsa Italiana Stock Exchange, Twice SIM, Banca Popolare di Ancona – UBI Group, Assogestioni, JPMorgan – Italy, Pioneer, Eurizon Capital, Azimut, UbiPramerica, Arca and Prima sgr, Assoreti, Allianz Bank Financial Advisors, Banca Fideuram/Sanpaolo Invest Sim, Banca Mediolanum, Finanza – Futuro Banca, Finecobank, Ubi Banca Private Investment. For the second stage (ASSORETI 2011), we are grateful to ASSORETI, and specifically to Marco Tofanelli and Antonio Spallanzani, who allowed a remarkable enlargement of the original sample. For their cooperation in running experiments, we thank another set of financial institutions: Allianz Bank Financial Advisors; Azimut; Banca Fideuram/Sanpaolo Invest Sim; Banca Mediolanum; Finanza & Futuro Banca; Finecobank and Ubi Banca Private Investment.Disclosure statementNo potential conflict of interest was reported by the authors.Notes1. Private pension schemes are expected to grow as pension reforms in these countries lead to a reduction in pay-as-you-go (PAYG) public pension benefits, traditionally organized as defined benefits (DB) plans.2. An individual is best understood as a succession of selves with different preferences and different levels of awareness of such preferences. While most of the time these systems interact synergistically to determine behaviour, at times they may compete, producing different responses to the same information.3. The idea of multiple systems of processing is not unique to decision-making and has been developed, in strikingly similar ways, by many thinkers in philosophy, psychology, neuroscience and medicine over the past several hundred years. The earliest accounts of dual-process theories in cognitive psychology date back to the 1970s and 1980s (Wason and Evans Citation1975; Evans Citation1989) and have become the focus of much interest in contemporary research on these topics (Evans and Over Citation1996; Sloman Citation1996; Stanovich Citation1999, Citation2011; Stanovich and West Citation2000; Kahneman and Frederick Citation2002; Barbey and Sloman Citation2007; Evans Citation2007, Citation2008; Kahneman Citation2011). Although there are nuances specific to each theoretical conception, for the most part these dual-process models are all structurally very similar.4. An overview of the project is offered in Lucarelli and Brighetti (Citation2010), where they refer to a first set of 445 individuals and focus on research questions that are different from those investigated in this paper.5. We take into consideration, properly in multivariate analysis, those conditions under which financial decisions could be affected by familial context (e.g. economic capability is typically referred to as overall familial condition) or by other forms of external influence (i.e. the presence of professional financial advice).6. Even if these individuals make professional financial decisions, we always asked them to answer based on their personal financial decisions.7. More than 80% of our sample are males. An analysis of the Istat annual household surveys shows that men are predominantly heads of household in around 70% of cases (Istat Citation2011).8. For a description of the task, visit the online appendix: http://www.risktolerance.univpm.it/IGTSCR.9. Even if gains and losses are only simulated, a similar performance pattern emerges when the nature of the incentive used is varied, for example, when giving real money instead of facsimile reinforcers (Bowman and Turnbull Citation2003).10. In the restricted sample, the fin-profession includes online traders, that is, those individuals specializing exclusively in short-term trading strategy, either professionally or as a secondary occupation.11. The p-value of the LR test, for the full model compared to the restricted one, is .0053 with 641 individuals, .0021 with 409 individuals, and .0359 with 570 individuals.