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Perceived Precautionary Savings Motives: Evidence from FinTech / Francesco D'Acunto, Thomas Rauter, Christoph K. Scheuch, Michael Weber.
- Format:
- Book
- Author/Creator:
- D'Acunto, Francesco.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w26817.
- NBER working paper series no. w26817
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Perceived Precautionary Savings Motives
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2020.
- Summary:
- We study the spending response of first-time borrowers to an overdraft facility and elicit their preferences, beliefs, and motives through a FinTech application. Users increase their spending permanently, lower their savings rate, and reallocate spending from non-discretionary to discretionary goods. Interestingly, liquid users react more than others but do not tap into negative deposits. The credit line acts as a form of insurance. These results are not fully consistent with models of financial constraints, buffer stock models, or present-bias preferences. We label this channel perceived precautionary savings motives: Liquid users behave as if they faced strong precautionary savings motives even though no observables, including elicited preferences and beliefs, suggest they should.
- Notes:
- Print version record
- March 2020.
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