A TCAI Research Team has been awarded a research grant ($207,018) by the National Endowment of Financial Education (NEFE). The project information is as follows:
Title:
APlus: Arizona Pathways to Life Success of University Students
Researchers:
Soyeon Shim, Principal Investigator
Jing Xiao, Co-PI
Bonnie Barber, Co-PI
Joyce Serido, Project manager
Project Period: 9/07 thru 8/09
Arizona Pathways to Life Success of University Students
Project Summary:
What accounts for individual differences in young adults' financial behaviors, economic aspirations, and work and
family choices? How do educational experiences (high school and college) affect the development of financial attitudes,
intentions, and behaviors during young adulthood? Ultimately, do positive financial behaviors influence an individual's
overall success in life and sense of identity? To this end, we propose to establish a landmark longitudinal study among
emerging young adults through multiple waves of data collection. For Wave 1 (the current project), we will begin with a
cohort of freshmen enrolled at the University of Arizona and will follow them for five or more years. For this study, we
propose a conceptual framework of the formation of young adults' positive financial behaviors and their effects on life
successes, which is an integration of theories about lifespan development, consumer socialization, and planned behavior.
By empirically testing and refining the model, our long-term goal is to develop a new theory for predicting financial
behavior and life-success outcomes, which will help us better understand origins, development, socialization processes,
socio-psychological factors, and pathways onto adulthood relevant to financial behaviors. The findings of the research
will provide useful knowledge to educators, public policy makers, and employers seeking ways to improve the quality of
life for young adults. We are requesting that NEFE fund the first wave of the study (a two-year period). This funding will
help us build the foundation for the longitudinal study, which will enable us to seek funds from other sources for the
following waves. NEFE's generous support for the Wave 1 study will be acknowledged in the Wave 1 and all subsequent waves
of the study.
TCAI is pleased to announce that a proposal entitled "Impact of Social Capital on Personal Bankruptcy and Default" has been awarded a grant of $5,000. The researchers include: Dr. Sumit Agarwal, Financial Economist, Federal Reserve Bank of Chicago, Souphala Chomsisengphet, Senior Financial Economist, Office of the Comptroller of the Currency, and Dr. Chunlin Liu, Assistant Professor of Finance, University of Nevada-Reno. The project summary is as follows:
Impact of Social Capital on Personal Bankruptcy and Default
Over the past 15 years, social capital has been declining while the numbers of personal bankruptcy filings and consumer defaults have been spiraling upwards. In this paper the researchers ask the following question: Does the decline in social capital impact consumer's bankruptcy and default decisions? Our preliminary results suggest that for a 1 point increase in the Social Capital Index there is a 0.3 points drop in the State Bankruptcy Index. A consumer who is married has a lower probability of default by 24%. Consumers who move to rural areas are 8% less likely to default in comparison to consumers who move to urban areas. Consumers who own a house are 24% less likely to declare bankruptcy. Next, the researchers would like to add one additional measure of social capital to their model - the expected mobility, as measured by the distance moved from the state of birth, and assess its impact on a consumer's default and bankruptcy decision.
TCAI sponsors a multidisciplinary research program and funds consumer finance research up to $5,000 for researchers from diverse disciplines. This year's proposal submission deadline is September 1, 2007. Last year, four research proposals were funded by TCAI and their summaries are below.
Financial instability, health, and marital risk
The research by Dr. Melissa Curran, Division of Family Studies and Human Development at University of Arizona, is about effects of family and other supports on family finance, health and marriage. If you were asked to describe your finances, what would you say? That sometimes it is difficult to pay monthly bills or that you need just a little more money? And what would you say about your finances 10 years ago compared to now, and how would you predict your finances 10 years from now? We are interested in the people for whom financial instability is a concern. We know that financial instability is related to having mental and physical health problems as well as marital problems. We also know, however, that support from others can make an important difference in health, marriage, and finances. In our current study, we are examining 2,059 people across the United States and trying to understand better the relationships among financial instability, health, and marital risk, and how support from family and others can have a positive influence for those experiencing financial worries. For more information, contact Dr. Curran at: macurran@email.arizona.edu.
A Longitudinal Path Model of Financial Behaviors among Young Adults
The research by Ms. Sun-A Lee, Mr. Jeong Jin Yu, Division of Family Studies and Human Development at University of Arizona, and Dr. Bonnie L. Barber at Murdoch University in Australia, is about young adults' financial behaviors. Previous research has shown that adolescents' positive relationships with their parents (e.g., parental advice on future plans and closeness to each other) are related to their future-oriented attitudes (e.g., aspiration for future success). It has also been found that adolescents' future-oriented attitudes are related to their healthy psychosocial adjustment including financial behavior. However, very little is presently known about the dynamics among parental advice, adolescents' future-oriented attitudes, and their later financial behaviors. Hence, this study examines how parental financial advice to their adolescent children (when children are in 10th grade) affects adolescents' future- oriented attitudes (when children are in 12th grade), which in turn leads to their financial behaviors in young adulthood (21 and 24 years old) using structural equation modeling. Data for this study from 21-year 9-wave longitudinal study, Michigan Study of Adolescent Life Transitions (MSALT), which began in 1983 with 6 th grade students. For more information, contact Ms. Lee at: sunal@u.arizona.edu.
Intergenerational Transmission of Savings Behavior and Family Communications
The research by Dr. Teresa A. Mauldin, Dr. Yoko Mimura, Dr. Joan Koonce, Mr. Michael Rupured, and Ms. Jenny Jordan, Department of Housing and Consumer Economics at University of Georgia , is about saving behavior of youth. Establishing the habit of regular savings at an early age will help everyone accomplish important goals and lead to long-term financial security. This study will explore the interrelationships among factors associated with savings of youths, their parents, and communications about savings within the family. The youths in our study are 14 to 18 years old. The researchers think that parents' use of information related to savings affects their own self-efficacy, knowledge, and behavior, and the latter three affects those of the youths. In addition, communications about savings within the family should have a significant impact on youths' financial knowledge and savings behavior. A better understanding of how and whether family communications about savings impact the savings behaviors of youth is beneficial for developing effective educational programs. For more information, contact Dr. Mauldin at: tmauldin@fcs.uga.edu.
The self-regulation model of goal attainment on consumer debt behavior
The research by Mr. Chuanyi Tang and Dr. Mary Ann Eastlick, Division of Retailing and Consumer Science at University of Arizona , is about consumer debt behavior. This research purports to put forward a goal-directed framework by incorporating motivation and conditional constraints in the context of consumer debt reduction behavior. In the study, consumer debt reduction behavior is regarded as a two-step goal-directed behavior. Its first step is goal setting, which involves the establishment of goal intention. The second step is goal striving, which entails effort to attain and maintain goals. The model hypothesizes that attitudes towards success, failure, and the goal-striving process determine goal intention, and trying. The appraisal task which involves assessments of efficacy with respect to means, affect toward means, and instrumental beliefs, combined with the performance of instrumental acts, explains the relationship between the goal intention and goal attainment. The primary objective of the study will be to explore the self-regulatory mechanisms and goal-driven debt reduction behavior. Its findings will benefit not only consumer researchers, but will also assist credit counseling agencies in improving their service and customer management efforts. For more information, contact Mr. Tang at: tang@email.arizona.edu.