INFLUENCE OF BEHAVIORAL FACTORS ON THE PROPENSITY FOR INDEBTEDNESS OF UNIVERSITY STUDENTS

Oliveira, Silvia Franco de

doi:10.5902/1983465935196

Brasil

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Article • Rev. Adm. UFSM 13 (4) • Oct-Dec 2020 • https://doi.org/10.5902/1983465935196 linkcopy

INFLUENCE OF BEHAVIORAL FACTORS ON THE PROPENSITY FOR INDEBTEDNESS OF UNIVERSITY STUDENTS

INFLUÊNCIA DOS FATORES COMPORTAMENTAIS NA PROPENSÃO AO ENDIVIDAMENTO DOS ESTUDANTES UNIVERSITÁRIOS

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

Purpose: The purpose of this paper is to analyze the influence of behavioral factors on the propensity for indebtedness of university students.

Design/methodology/approach: The study investigated a random sample of 319 students from a private university in São Paulo. Using the Modeling of Structural Equations, the behavioral factors were measured. For the data analysis, descriptive statistics and median difference tests (Mann-Whitney U test) and independence tests (Chi-square test) were performed.

Findings: The findings indicate that: a) the behavior factor presents the strongest effect on the propensity to debt; b) the degree of indebtedness is influenced by sociodemographic variables (gender, race, marital status, occupation and income); c) the levels of risk perception, materialism and propensity for indebtedness are the same for indebted and non-indebted groups; d) the levels of financial behavior and rationality differ between indebted and non-indebted groups.

Research limitations/implications: The data collection was carried out in a metropolitan region where the cohort surveyed has specific characteristics that make it difficult to generalize the results.

Practical implications: These results may be useful in assisting: a) school leaders in the design of educational programs; b) the financial system in the development of financial strategies and products.

Social implications: Educational policy makers can take action to improve the most vulnerable groups.

Originality/value: The main theoretical contribution of this work was made by the integrated analysis of four different constructs on the propensity for indebtedness of university students: materialism, rationality, financial behavior and risk perception.

Keywords: Materialism; Rationality; Financial Behavior; Risk Perception; Propensity for Indebtedness

Factors		Variables	Mean	Median	Standarddeviation
Net	Moral impact	20.1 - It is right to spend more than I make.	1.39	1.00	0.82
		20.2 - I think it is normal for people to go into debt to pay for their things.	2.36	2.00	1.10
		20.3 - People would be disappointed in me if they knew that I am in debt. *	2.67	3.00	1.15
	Preference over Time	20.4 - It is better to buy something on credit than to save up the money first.	2.09	2.00	1.02
		20.5 - I prefer to purchase in installments rather than to wait until I have enough money to pay in cash. *	2.51	2.00	1.10
		20.6 - I prefer to pay in installments even if the total amount ends up being more expensive.	1.94	2.00	1.00
	Degree of Self-Control	20.7 - I do not know exactly how much I owe on store cards, credit cards or bank loans.	1.85	1.00	1.08
		20.8 - It is not important to know how to control the expenses of my household.	1.30	1.00	0.63
		20.9 - It is okay to be in debt if I know I can pay. *	3.38	4.00	1.26
Financial Behavior	Financial management	21.1 - I am concerned with managing my money better.	3.75	4.00	0.68
		21.2 - I record and control my personal expenses.	2.83	3.00	1.08
		21.3 - I set financial goals that influence how I manage my finances.	3.02	3.00	1.08
		21.4 - I follow a weekly or monthly budget or spending plan.	2.71	3.00	1.11
		21.5 - I never go more than a month without taking stock of my expenses.*	2.76	3.00	1.15
		21.6 - I am satisfied with the system I use for controlling my finances. *	2.95	3.00	1.10
		21.7 - I pay my bills on time. *	3.78	4.00	0.91
	Use of credit	21.8 - I know how to identify the costs I will pay when buying a product on credit. *	3.39	4.00	1.18
		21.9 - I have not used automatic bank credit cards because I have money available.	3.58	4.00	1.13
		21.10 - When buying on installments, I compare the credit options that are available. *	3.12	3.00	1.42
		21.11 - Less than 10% of the income I will earn the following month is committed to purchases on credit.	3.10	3.00	1.51
		21.12 - I pay my credit card bill(s) in full to avoid financial charges.	4.04	4.00	0.95
		21.13 - I check my credit card bill for any errors or undue charges. *	3.83	4.00	1.09
	Investment and savings	21.14 - I set money aside monthly.	3.18	3.00	1.04
		21.15 - I set money aside to buy a more expensive product. Example: car, apartment.	3.11	3.00	1.21
		21.16 - I have a financial reserve that is greater than or equal to three times my monthly income.	3.15	3.00	1.51
	Planned consumption	21.17 - I compare prices when making a purchase.	3.65	4.00	0.84
		21.18 - I analyze my finances in depth before making any major purchases.	3.49	4.00	0.90
		21.19 - I do not buy on impulse.	2.82	3.00	0.98
		21.20 - I prefer to save up money to buy something in cash rather than buying a financed product. *	3.10	3.00	1.01
		21.21 - My friends and family advise me on financial matters. *	2.63	3.00	1.07
Materialism	Centrality	22.1 - I like to spend money on expensive things.	2.87	3.00	1.12
		22.2 - Buying things gives me great pleasure.	3.37	4.00	1.12
		22.3 - I like a lot of luxury in my life.	2.73	3.00	1.14
	Happiness	22.4 - My life would be much better if I had a lot of the things I do not have now.	2.99	3.00	1.14
		22.5 - I would be much happier if I could buy more things.	3.42	4.00	1.15
		22.6 - I feel uncomfortable when I cannot buy everything I want.	3.21	3.00	1.15
	Success	22.7 - I admire people who own houses, cars and expensive clothes.	2.74	3.00	1.17
		22.8 - I like to have things that impress people.	2.29	2.00	1.15
		22.9 - Spending a lot of money is among the most important things in life.	1.73	1.00	0.92
Rationality		23.1 - I believe in being logical and rational when deciding on a product.	3.88	4.00	0.92
		23.2 - Before I make a final decision about a product, I consider the pros and cons about each product.	3.87	4.00	0.92
		23.3 - Before making a final decision about a product, I look for a lot of information about each product.	3.79	4.00	0.95
		23.4 - Before making a final decision about a product, I think a lot about myself using the product.	4.01	4.00	0.84
		23.5 - I believe in exercising self-control and not being impulsive when deciding on a product.	3.76	4.00	0.91
		23.6 - I believe in making a responsible, well thought-out decision.	3.80	4.00	0.85
		23.7 - I believe in selecting a product based on a careful examination of all its features. *	3.71	4.00	0.91
		23.8 - I think it is important to select the most practical product.*	3.46	4.00	0.89
		23.9 - When I am deciding whether or not to buy a product, I think about its usefulness.	4.07	4.00	0.83
Risk perception		24.1 - Spending a lot of money on lotteries.	3.98	4.00	1.22
		24.2 - Being someone’s guarantor or co-signer.	3.87	4.00	1.08
		24.3 - Spending money impulsively, without thinking about the consequences.	4.41	5.00	0.89
		24.4 - Investing in a business that has a high chance of failing.	4.13	4.00	1.06
		24.5 - Lending most of your monthly salary or income to a friend or family member.	3.83	4.00	1.14

Sociodemographic variables		Proportion of committed income				Total	Chi-square test
Sociodemographic variables		Has no debt	Up to 15%	16-30%	>30%	Total	p-value	Conclusion	Cramér’s V
Gender	Female	46	16	22	40	124	0.003	Influence	0.211
	Female	37%	13%	18%	32%	100%
	Male	114	15	21	45	195
	Male	58%	8%	11%	23%	100%
Race	White and Asian	138	24	36	57	255	0.004	Influence	0.204
	White and Asian	54%	9%	14%	22%	100%
	Black and Brown	22	7	7	28	64
	Black and Brown	34%	11%	11%	44%	100%
Marital status	Single	149	29	37	66	281	0.003	Influence	0.208
	Single	53%	10%	13%	24%	100%
	Stable Relationship	11	2	6	19	38
	Stable Relationship	29%	5%	16%	50%	100%
Income	No monthly income	74	3	3	5	85	0.000	Influence	0.445
	No monthly income	87%	4%	4%	6%	100%
	Has monthly income	86	28	40	80	234
	Has monthly income	37%	12%	17%	34%	100%
Age	Up to 30 years	153	29	40	79	301	0.805	does not influence	0.056
	Up to 30 years	51%	10%	13%	26%	100%
	>30 years	7	2	3	6	18
	>30 years	39%	11%	17%	33%	100%
Occupation	I do not work	58	5	1	3	67	0.000	Influence	0.398
	I do not work	87%	7%	1%	4%	100%
	Work	102	26	42	82	252
	Work	40%	10%	17%	33%	100%
Total		160	31	43	85	319
Total		50%	10%	13%	27%	100%

Rationality Level	Reason for indebtedness	Quantity	% Total (319)
Low	Compulsive buying	53	16.6%
	Mismanagement of money	69	21.6%
	Easy access to credit	67	21.0%
	No discount for cash payment	15	4.7%
	Lending one’s name, being a guarantor, being a co-signer	21	6.6%
High	Did not get into debt	160	50.2%
	Acquisition of own home	12	3.8%
	Investment in a higher education program	42	13.2%
	Unemployment or reduced income	21	6.6%
	Health problems	3	0.9%

Factors	Average Variances Extracted (AVEs)	Composite Reliability
Centrality	0.6668	0.8570
Happiness	0.7224	0.8863
Success	0.6741	0.8606
Planned consumption	0.5259	0.7604
Use of credit	0.5694	0.7983
Financial management	0.5641	0.8380
Investment and savings	0.6273	0.8343
Degree of self-control	0.5796	0.7112
Moral impact	0.5820	0.7196
Preference over Time	0.5525	0.7069
Financial Behavior	0.5381	0.8175
Net	0.6631	0.8421
Materialism	0.7141	0.8822
Rationality	0.5414	0.8909
Risk Perception	0.5734	0.8703

Factors	Correlation	Square root of the AVE
Centrality - Happiness	0.5621	0.8166
Centrality - Success	0.6002	0.8166
Happiness - Success	0.5658	0.8499
Planned consumption - Use of credit	0.3522	0.7252
Planned consumption - Financial management	0.5189
Planned consumption - Investment and savings	0.4451
Use of credit - Financial management	0.2336	0.7546
Use of credit - Investment and savings	0.3797	0.7546
Financial management - Investment and savings	0.4890	0.7511
Financial Behavior - Indebtedness	-0.4121	0.7336
Financial behavior - Materialism	-0.1057
Financial behavior - Rationality	0.5190
Financial behavior - Risk perception	0.1190
Indebtedness - Materialism	0.2051	0.8143
Indebtedness - Rationality	-0.3076
Indebtedness - Risk perception	-0.1843
Materialism - Rationality	-0.0299	0.8450
Materialism - Risk perception	0.0562	0.8450
Rationality - Risk perception	0.2553	0.7358
Degree of self-control - Moral impact	0.2279	0.7613
Degree of self-control - Preference over time	0.7540	0.7613
Moral impact - Preference over time	0.2112	0.7629

Factors and variables	Student’s T	Factors and variables	Student’s T
Q21.1 <- Financial management	18.6410	Q20.6 <- Preference over time	4.0558
Q21.11 <- Use of credit	13.6521	Q20.7 <- Degree of self-control	96.0323
Q21.12 <- Use of credit	12.1656	Q20.8 <- Degree of self-control	5.0249
Q21.14 <- Investment and savings	35.6187	Moral <- Indebtedness	4.2304
Q21.15 <- Investment and savings	21.6221	Time <- Indebtedness	69.7381
Q21.16 <- Investment and savings	17.7415	Management <- Financial behavior	31.6724
Q21.17 <- Planned consumption	12.8492	Centrality <- Materialism	16.8559
Q21.18 <- Planned consumption	37.7823	Planned consumption <- Financial behavior	24.6789
Q21.19 <- Planned consumption	5.4791	Degree of self-control <- Indebtedness	84.3182
Q21.2 <- Financial management	21.2421	Use of credit <- Financial behavior	4.9132
Q21.3 <- Financial management	24.5508	Happiness <- Materialism	20.6897
Q21.4 <- Financial management	20.8767	Investment and savings <- Financial behavior	17.8610
Q21.9 <- Use of credit	23.0002	Q23.1 <- Rationality	20.2504
Q22.1 <- Centrality	24.4713	Q23.2 <- Rationality	18.434
Q22.2 <- Centrality	28.7874	Q23.3 <- Rationality	15.3421
Q22.3 <- Centrality	56.9627	Q23.4 <- Rationality	7.4649
Q22.4 <- Happiness	52.8054	Q23.5 <- Rationality	13.0641
Q22.5 <- Happiness	55.6405	Q23.6 <- Rationality	18.9346
Q22.6 <- Happiness	31.1987	Q23.9 <- Rationality	7.7291
Q22.7 <- Success	38.7113	Q24.1 <- Risk perception	6.0692
Q22.8 <- Success	59.1178	Q24.2 <- Risk perception	6.8393
Q22.9 <- Success	20.6446	Q24.3 <- Risk perception	6.8800
Q20.1 <- Moral impact	12.1432	Q24.4 <- Risk perception	6.6118
Q20.2 <- Moral impact	2.4578	Q24.5 <- Risk perception	6.2020
Q20.4 <- Preference over time	90.4138	Success <- Materialism	17.226

Factors	Kolmogorov-Smirnov test				Levene’s test (based on mean)		Mann-Whitney U test
	Has debts		No debts		p-value	Does it have homogeneity of variances?	p-value	Are the medians equal?	Is there a difference in behavior between indebted and non-indebted individuals?
	p-value	Does it have normal distribution?	p-value	Does it have normal distribution?	p-value	Does it have homogeneity of variances?	p-value	Are the medians equal?
Net	0.000	no	0.000	no	0.200	yes	0.191	yes	No difference
Financial Behavior	0.200	yes	0.200	yes	0.002	no	0.000	no	there is a difference
Materialism	0.200	yes	0.200	yes	0.044	no	0.802	yes	No difference
Rationality	0.000	no	0.000	no	0.007	no	0.000	no	there is a difference
Risk Perception	0.000	no	0.000	no	0.184	yes	0.148	yes	No difference

Factors	Has debt				Has no debt				Total			Flores (2012 )		Santos & Souza (2014 ) *
Factors	Mean	Standard deviation	Median	Average rank	Mean	Standard deviation	Median	Average rank	Mean	Standard deviation	Median	Mean	Median	Mean
Net	1.7	0.7	1.5	153	1.7	0.6	1.7	166	1.7	0.7	1.6	1.9	2.0	1.0
Financial Behavior	3.1	0.6	3.1	129	3.5	0.5	3.6	191	3.3	0.6	3.4	2.6	2.6
Materialism	2.8	0.8	2.9	161	2.8	0.8	2.8	159	2.8	0.8	2.8	2.3	2.2	2.6
Rationality	3.7	0.7	3.9	139	4.0	0.6	4.0	180	3.9	0.7	4.0
Risk Perception	4.1	0.9	4.3	167	4.1	0.8	4.2	153	4.1	0.8	4.3	3.6	4.0

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[TFN1] (*) Removed in the final model. Source: Research data