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More About This Title Economic Psychology
English
A comprehensive overview of contemporary economic psychology
Economic Psychology presents an accessible overview of contemporary economic psychology. The science of economic mental life and behavior is increasingly relevant as people are expected to take more responsibility for their household and personal economic decisions. The text will, in addition to reviewing current knowledge on each topic presented, consider the practical and policy implications for supporting economic decision making. Economic Psychology examines the central aspects of adult decision making in everyday life and includes the theories of economic decision making based on risk, value and affect, and theories of intertemporal choice. The text reviews the nature and behavioral consequences of economic mental representations about such things as material possessions, money and the economy.
The editor Robert Ranyard—a noted expert on economic psychology—presents a life-span developmental approach, from childhood to old age. He also reviews the important societal issues such as charitable giving and economic sustainability. This vital resource:
- Reviews the economic psychology in everyday life including financial behaviour such as saving and tax-paying and matters such as entrepreneurial activity
- Offers an introduction to the field and traces the emergence of the discipline, from Adam Smith to George Katona and Herbert Simon
- Includes information on societal issues such as charitable giving and pro-environmental behaviour
- Considers broader perspectives on economic psychology: life-span psychological development from childhood to old age
Written for students of psychology, Economic Psychology reviews the most important information on contemporary economic psychology with a focus on individual and household economic decision making, ranging widely across financial matters such as borrowing and saving, and economic activities such as buying, trading, and working.
English
ROB RANYARD is a freelance researcher and Visiting Professor affiliated to the Centre for Decision Research, University of Leeds, UK. He is the editor of A Handbook of Process Tracing Methods for Decision Research (2011) and has publishing articles in journals including The Journal of Economic Psychology. He is a well-known figure in the field, previously serving as treasurer of the International Association for Research in Economic Psychology (IAREP) and currently being the IAREP country representative for the UK.
English
Preface xv
Notes on Contributors xvii
Acknowledgements xxvii
PART 1 Fundamentals 1
Chapter 1 Introduction to Economic Psychology: The Science of Economic Mental Life and Behaviour 3
Rob Ranyard and Vera Rita de Mello Ferreira
1.1 Introduction 4
1.2 The emergence of the discipline 5
1.3 Research methods 10
1.4 Economic mental representations 11
1.5 Financial behaviour and economic activity 12
1.6 Life-span perspectives 13
1.7 Economic psychology and society 14
1.8 Summary 16
Note 16
Review questions 16
References 16
Further reading 18
Chapter 2 Theories of Economic Decision-Making: Value, Risk and Affect 19
Anton Kühberger and Michael Schulte-Mecklenbeck
2.1 Introduction 20
2.2 Value and utility 20
2.3 Risk and uncertainty 22
2.4 Developments based on Subjectively Expected Utility (SEU) 23
2.5 B eyond Utility-Based Theories 25
2.6 Hot Decisions 27
2.7 Summary 31
Review Questions 31
References 31
Further Reading 34
Chapter 3 Future-Oriented Decisions: Intertemporal Choice 35
Daniel Read and Marc Scholten
3.1 Introduction 36
3.2 Rational Intertemporal Choice 36
3.3 A nomalies in Intertemporal Choice 38
3.4 E xplaining Anomalies 41
3.5 Framing Effects 42
3.6 What Do We Care About When We Measure Intertemporal Choice? 44
3.7 Summary 45
Notes 46
Review Questions 46
References 47
Further Reading 50
Part 2 Research Methods 51
Chapter 4 Research Methods for Economic Psychology 53
Gerrit Antonides
4.1 Introduction 54
4.2 Q ualitative Methods 55
4.3 Q uantitative Methods 58
4.4 Conclusion 63
4.5 Summary 64
Review Questions 64
References 64
Further Reading 68
Chapter 5 Assessing Psychological Dispositions and States that Can Influence Economic Behaviour 69
Simon McNair and W. Ray Crozier
5.1 Introduction 70
5.2 Psychological Dispositions and Economic Behaviour 71
5.3 Psychological States and Economic Behaviour 76
5.4 Methodological Issues in Assessing Dispositions and States 81
5.5 Summary 82
Notes 83
Review Questions 83
References 83
Further Reading 87
Chapter 6 Developing, Evaluating, and Using Subjective Scales of Personality, Preferences, and Well-Being: A Guide to Psychometrics for Psychologists and Economists 88
Alex M. Wood and Christopher J. Boyce
6.1 Introduction 89
6.2 The Importance of Psychometrics for Economic
Psychology Research 89
6.3 S teps in Developing a Scale 91
6.4 Other Steps and Conclusion 100
6.5 Summary 100
Note 100
Review Questions 101
References 101
Further Reading 103
Part 3 E conomic Mental Representations 105
Chapter 7 The Psychological Meaning of Money 107
Tomasz Zaleskiewicz, Agata Gasiorowska and Kathleen D. Vohs
7.1 Introduction 108
7.2 Money: Economic and Psychological Perspectives 108
7.3 Predictions 109
7.4 The Method of Money Priming: Akin to Getting a Taste of Big Money 111
7.5 Results 112
7.6 Summary 118
Acknowledgements 118
Review questions 118
References 119
Further Reading 121
Chapter 8 Mental Accounting and Economic Behaviour 123
Gerrit Antonides and Rob Ranyard
8.1 Introduction 124
8.2 B road Mental Accounts 124
8.3 Mental Accounts for Specific Financial Decisions 126
8.4 Other Categorizations of Money 127
8.5 Functions of Mental Accounts 129
8.6 D eterminants of Mental Accounting 133
8.7 Conclusion 134
8.8 Summary 135
Review Questions 135
References 136
Further Reading 138
Chapter 9 How Laypeople Understand the Economy 139
David Leiser and Zeev Krill
9.1 Introduction: Understanding Economics Is Hard Yet Expected 140
9.2 Interacting Variables 143
9.3 U sing Metaphors 147
9.4 Financial Literacy 149
9.5 Summary 150
Review Questions 151
References 151
Further Reading 154
Chapter 10 The Citizen’s Judgements of Prices and Inflation 155
Rob Ranyard, Fabio Del Missier, Nicolao Bonini and Davide Pietroni
10.1 Introduction 156
10.2 Price Evaluation 156
10.3 Inflation 161
10.4 Policy Implications 165
10.5 Summary 166
Notes 166
Review Questions 167
References 167
Further Reading 170
Chapter 11 Materialism and the Meanings of Possessions 171
W. Ray Crozier
11.1 Introduction: The Socio-Economic Context of Possessions and Materialism 172
11.2 The Psychological Meanings of Possessions 173
11.3 Psychological Aspects of Materialism 176
11.4 Materialism and Subjective Well-Being 178
11.5 Summary 182
Notes 183
Review Questions 183
References 183
Further Reading 185
Part 4 Financial Behaviour 187
Chapter 12 Defining and Influencing Financial Capability 189
Ivo Vlaev and Antony Elliott
12.1 Introduction 190
12.2 A New Conceptualization of Financial Capability 190
12.3 Ways to Influence Financial Capability 196
12.4 Conclusion 202
12.5 Summary 202
Notes 202
Review Questions 203
References 203
Further Reading 205
Chapter 13 Saving Behaviour: Economic and Psychological Approaches 206
Ellen K. Nyhus
13.1 Introduction 207
13.2 E conomic Perspectives 209
13.3 Psychological Approaches 211
13.4 Summary 217
Review Questions 218
References 218
Further Reading 221
Chapter 14 The Psychology of Borrowing and Over-Indebtedness 222
Rob Ranyard, Sandie McHugh and Simon McNair
14.1 Introduction 223
14.2 D eterminants of Borrowing 224
14.3 Credit Choice Processes 225
14.4 Repayment Strategies 228
14.5 Routes to Over-Indebtedness 229
14.6 Psychological Consequences of Debt 230
14.7 Policy Implications 231
14.8 Summary 233
Review Questions 234
References 234
Further Reading 238
Chapter 15 Behaviour in Financial Markets 239
Martin Hedesström
15.1 Introduction 240
15.2 D o Stocks Always Trade at the ‘Right’ Price? 240
15.3 Cognitive Influences on Investor Behaviour 242
15.4 E motional Influences 246
15.5 S ocial Influences 248
15.6 Policy Implications 250
15.7 Summary 250
Review Questions 250
References 251
Further Reading 254
Chapter 16 Tax Behaviour 255
Erich Kirchler and Erik Hoelzl
16.1 Introduction 256
16.2 Taxes and Tax Compliance 256
16.3 Tax Attitudes by Individual Taxpayers 258
16.4 Profit Shifting and Aggressive Tax Planning by Companies 260
16.5 Regulation Strategies by Tax Authorities 261
16.6 Interaction Climates Between Taxpayers and Tax Authorities 264
16.7 Practical Implications 267
16.8 Summary 268
Review Questions 268
References 268
Further Reading 271
PART 5 E conomic Activity 273
Chapter 17 Volunteer Organizations: Motivating with Awards 275
Bruno S. Frey and Jana Gallus
17.1 Introduction 276
17.2 Organizational Forms 276
17.3 A wards as Motivation 279
17.4 Conditions for Successfully Giving Awards to Volunteers 282
17.5 E ffects Of Awards on Performance 284
17.6 Summary 285
Review Questions 285
References 285
Further Reading 286
Chapter 18 Entrepreneurial Activity 287
Artur Domurat and Tadeusz Tyszka
18.1 Introduction 288
18.2 E nvironmental Factors and Entrepreneurship 289
18.3 Reasons for Engaging in Entrepreneurial Activity 290
18.4 Personality Characteristics of Entrepreneurs 292
18.5 Psychological Traps in Entrepreneurship 296
18.6 Teaching Entrepreneurship 297
18.7 Summary 299
Review Questions 300
References 300
Further Reading 303
Chapter 19 The Economic Psychology of Gambling 304
Juemin Xu and Nigel Harvey
19.1 Introduction 305
19.2 Lotteries 305
19.3 S cratch Cards 307
19.4 Roulette 307
19.5 Fruit Machines 309
19.6 S ports Betting 309
19.7 Card Games 311
19.8 Problem Gambling 312
19.9 Summary 314
Review Questions 314
References 314
Further Reading 318
PART 6 Life-Span Perspectives 319
Chapter 20 Economic Socialization: Childhood, Adolescence, and Early Adulthood 321
Annette Otto and Joyce Serido
20.1 Introduction 322
20.2 A Contextual Framework for Economic Behaviour Development 322
20.3 The Role of Parents in Economic Socialization 325
20.4 The Study of Economic Behaviour Development From Childhood Through Early Adulthood 327
20.5 Summary 331
Review Questions 331
References 331
Further Reading 336
Chapter 21 Childhood Psychological Predictors of Lifelong Economic Outcomes 337
Mark Egan, Michael Daly, and Liam Delaney
21.1 Introduction 338
21.2 Literature Review 338
21.3 Lifecourse Perspective 344
21.4 Methodological Challenges 346
21.5 Policy Implications 348
21.6 Conclusion 349
21.7 Summary 349
Notes 350
Review Questions 350
References 350
Further Reading 353
Chapter 22 The Economic Psychology of Financial Decision-Making and Money Management in the Household 354
Stefanie J. Sonnenberg
22.1 Introduction 355
22.2 Financial Decision-Making in the Household 356
22.3 Household Money Management 361
22.4 Conclusion 366
22.5 Summary 367
Notes 368
Review Questions 368
References 368
Further Reading 370
Chapter 23 Ageing and Economic Decision-Making 371
Wändi Bruine De Bruin
23.1 Introduction 372
23.2 The Role of Cognitive Deliberation in Decision Making 372
23.3 The Role of Experience-Based Knowledge in Decision-Making 373
23.4 The Role of Emotions in Decision-Making 374
23.5 The Role of Motivation and Strategies in Decision-Making 375
23.6 Interventions 376
23.7 D irections for Future Research 378
23.8 Summary 380
Acknowledgements 380
Review Questions 381
References 381
Further Reading 386
Part 7 Economic Psychology and Society 387
Chapter 24 Psychological Determinants of Charitable Giving 389
Tehila Kogut and Ilana Ritov
24.1 Introduction 390
24.2 D onation Decisions: Costs and Rewards 390
24.3 Causes that Elicit More Help 391
24.4 S pecific Individuals in Need 393
24.5 E ffectiveness and Impact 395
24.6 Who Helps – and When? 396
24.7 Main Research Methods in the Study of Charitable Giving 398
24.8 Future Research Directions 399
24.9 Summary 400
Review Questions 400
References 400
Further Reading 404
Chapter 25 Life Satisfaction and Emotional Well-Being: Psychological, Economic and Social Factors 405
Tommy Gärling and Amelie Gamble
25.1 Introduction 406
25.2 Views of Well-Being in Economics and Psychology 406
25.3 Measurement of Subjective Well-Being 407
25.4 Factors Influencing Subjective Well-Being 409
25.5 Consequences of Subjective Well-Being 415
25.6 Summary 417
Review Questions 417
References 417
Further Reading 420
Chapter 26 Living in Poverty: Understanding the Financial Behaviour of Vulnerable Groups 421
Cäzilia Loibl
26.1 Introduction 422
26.2 D efinition of Poverty 422
26.3 Characteristics of Financial Behaviours 423
26.4 Vulnerable Population Groups 427
26.5 Policy Implications 431
26.6 Summary 431
Review Questions 431
References 432
Further Reading 434
Chapter 27 Economic Psychology and Pro-Environmental Behaviour 435
Michel Handgraaf, Anouk Griffioen, Jan Willem Bolderdijkand John Thøgersen
27.1 Introduction 436
27.2 B ounded Rationality 437
27.3 The Environment as a Social Dilemma 441
27.4 Conclusion 444
27.5 Summary 445
Review Questions 446
References 446
Further Reading 450
Chapter 28 Insurance Behaviour and Society 451
Rob Ranyard, John K. Ashton and Bill Hebenton
28.1 Introduction 452
28.2 Insurance as Risk Protection 452
28.3 Mis-Selling 456
28.4 Insurance Fraud 459
28.5 Summary 462
Notes 463
Review Questions 463
References 463
Further Reading 467
Index 469
