Subject. The article investigates factors of choosing the household’s financial strategies in modern Russian conditions. Objectives. The aim is to study the effect of material and socio-psychological characteristics of Russians on their propensity to form savings and attract loans. Methods. To analyze the factors of financial behavior of Russians, I use databases of the Russian Longitudinal Monitoring Survey. The propensity to form savings and attract loans is estimated, using probit, ordinal probit, and tobit regression. The Big Five Personality Traits model is applied to consider psychological characteristics of the family head in financial decisions. Results. The estimates confirmed the provisions of the life cycle theory on changing the financial strategy (transition from borrowings when creating the material base of the household at the stage of its formation to savings to finance expenses at retirement age after repayment of home and car loans) as the age of the head of household changes. The precautionary motive effect (formation of financial reserves in anticipation of deteriorating the family's financial situation) was estimated as insignificant. Conclusions. The psychological characteristics of the family head influence the choice of financial strategy of Russians. Emotionally unstable Russians are not inclined to accept a debt burden, and those characterized by high openness to experience are more wasteful and do not tend to save. I revealed a decrease in the role of social networks in financing household cash gaps and an increase in the role of financial intermediaries in the implementation of financial strategies of Russians.
Keywords: financial behavior, savings behavior, credit behavior, life-cycle hypothesis, Big Five Personality Traits model
Tregubova A.A., Toropova T.V., Yaraskhanova E.U. [Russian household saving behavior: Whether the theory is real life?]. Finansy i kredit = Finance and Credit, 2013, no. 41, pp. 59–67. URL: Link (In Russ.)
Malkina M.Yu., Khramova I.Yu. [Analyzing the saving behavior of Russian banks' depositors]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2016, no. 8, pp. 4–17. URL: Link (In Russ.)
Maratkanova I.V. [The impact of internal and external environment factors on savings behavior of households in Russia]. Finansy i kredit = Finance and Credit, 2019, vol. 25, iss. 1, pp. 159–176. (In Russ.) URL: Link
Malkina M.Yu., Khramova I.Yu. [Determinants of household saving behavior in Russia: An econometric analysis]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2019, vol. 18, iss. 4, pp. 406–421. (In Russ.) URL: Link
Kadochnikova E.I. [Analysis of the trends and determinants of credit and saving behavior of households in the Russian regions]. Russian Journal of Economics and Law, 2021, no. 4, pp. 661–675. URL: Link (In Russ.)
Fisher I. The Theory of Interest as Determined by Impatience to Spend Income and Opportunity to Invest It. N.Y., McMillan, 1930, 566 p. URL: Link_ fisher.pdf?utm_source=direct_download
Modigliani F., Brumberg R.H. Utility Analysis and the Consumption Function: An Interpretation of Cross-Section Data. In: Kurihara K.K. (ed.). Post-Keynesian Economics. New Brunswick, N.J., Rutgers University Press, 1954.
Ando A., Modigliani F. The “Life Cycle” Hypothesis of Saving: Aggregate Implications and Tests. The American Economic Review, 1963, vol. 53, no. 1, part 1, pp. 55–84. URL: Link
Modigliani F. The Role of Intergenerational Transfers and Life Cycle Saving in the Accumulation of Wealth. The Journal of Economic Perspectives, 1988, vol. 2, no. 2, pp. 15–40. URL: Link
Friedman M.A. A Theory of the Consumption Function. Princeton, Princeton University Press, 1957. URL: Link
Hall R.E. Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence. Journal of Political Economy, 1978, vol. 86, no. 6, pp. 971–987. URL: Link
Hall R.E., Mishkin F.S. The Sensitivity of Consumption to Transitory Income: Estimates from Panel Data on Households. Econometrica, 1982, vol. 50, no. 2, pp. 461–481. URL: Link
Stiglitz J.E., Weiss A. Credit Rationing in Markets with Imperfect Information. TheAmerican Economic Review, 1991, vol. 71, no. 3, pp. 393–410. URL: Link
Alessandra Guariglia, Byung-Yeon Kim. Earnings Uncertainty, Precaution Saving, and Moonlighting in Russia. Journal of Population Economics, 2006, vol. 17, no. 2, pp. 289–310. URL: Link
Thaler R.H. Anomalies: Saving, Fungibility, and Mental Accounts. Journal of Economic Perspectives, 1990, vol. 4, no. 1, pp. 193–205. URL: Link
Thaler R.H. Psychology and Savings Policies. The American Economic Review, 1994, vol. 84, no. 2, pp. 186–192. URL: Link
Gerhard P., Gladstone J.J., Hoffmann A.O. Psychological Characteristics and Household Savings Behavior: The Importance of Accounting for Latent Heterogeneity. Journal of Economic Behavior and Organization, 2018, vol. 148, pp. 66–82. URL: Link
Fuchs-Schundeln N., Masella P., Paule-Paludkiewicz H. Cultural Determinants of Household Saving Behavior. Journal of Money, Credit and Banking, 2020, vol. 52, no. 5, pp. 1035–1070. URL: Link
Gomes O. Behavioral Savings: Heterogeneous Household Beliefs and Aggregate Nonlinearities. Nonlinear Dynamics, Psychology, and Life Sciences, 2021, vol. 25, no. 2, pp. 179–205. URL: Link
Katona G. Psychological Analysis of Economic Behaviour. N.Y., McGrow-Hill, 1951.
Katona G. Psychological Economics. N.Y., Elsevier, 1975.
Lunt P., Livingstone S.M. Mass Consumption and Personal Identity: Everyday Economic Experience. Buckingham, UK, Open University Press, 1992.
Gimpel'son V.E., Zudina A.A., Kapelyushnikov R.I. [Non-cognitive components of human capital: Evidence from Russian data]. Voprosy Ekonomiki, 2020, no. 11, pp. 5–31. (In Russ.) URL: Link
McCrae R.R. NEO-PI-R Data from 36 Cultures: Further Intercultural Comparisons. In: R.R. McCrae, J. Allik (eds). The Five-Factor Model of Personality Across Cultures. International and Cultural Psychology Series. Springer, Boston, MA, 2002. URL: Link
Maksimova M.A. [The return to non-cognitive skills on the Russian labor market]. Prikladnaya ekonometrika = Applied Econometrics, 2019, vol. 53, pp. 55–72. URL: Link (In Russ.)
Rozhkova K.V. [The return to noncognitive characteristics in the Russian labor market]. Voprosy Ekonomiki, 2019, no. 11, pp. 81–107. (In Russ.) URL: Link