What is it about?
Budgeting is an important step in consumer finance. Budgeting behaviour is considered a desirable financial behaviour to indicate consumer financial capability. However, systematic research on budgeting behaviour with a large scale national sample is limited. The purpose of this study was to address this research gap and examine characteristics of budgeting behaviour from the perspective of a behavioural hierarchy, which is related to mental accounting.
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Why is it important?
The assumption holds that consumer financial behaviours may be performed in a hierarchical manner along with an increase in economic resources. Using data from the 2015 National Financial Capability Study, evidence suggests that budgeting behaviour is at the lower end of the behavioural hierarchy. This finding has implications for consumer financial professionals.
Perspectives
Hope this article is informative for researchers and practitioners who help improve consumer wellbeing.
Dr. Jing Jian Xiao
University of Rhode Island
Read the Original
This page is a summary of: Mental accounting and behavioural hierarchy: Understanding consumer budgeting behaviour, International Journal of Consumer Studies, July 2018, Wiley,
DOI: 10.1111/ijcs.12445.
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