Academic journal article Journal of Economics and Economic Education Research

Scaredy Cats to Cool Cats: How Time Perspective Matters in Attitude and Intent toward Financial Decisions

Academic journal article Journal of Economics and Economic Education Research

Scaredy Cats to Cool Cats: How Time Perspective Matters in Attitude and Intent toward Financial Decisions

Article excerpt


Numerous studies have attempted to understand the factors that make some individuals more or less risk averse in building their investment portfolios, whether in "normal" times or in times of economic downturns. However, none of those studies have utilized the recently published Zimbardo Time Perspective Index (ZTPI) created by Philip Zimbardo of Stanford and John Boyd of Google (Zimbardo and Boyd, 2008), which is very persuasive in postulating that one's perspectives concerning past, present, and future have a major impact on financial decisions. The primary purpose of this study is to examine the effects of how an individual's perception of time determines that individual's attitudes and intended actions concerning job changes in times of national/global financial crises. The secondary purpose of this study is to test whether the standard scale items are more applicable than tailored scale items to this type of problem.

Specifically, the study primarily seeks to learn whether any particular time perspectives have strong effects on an individual's intention to change jobs during this financial crisis. The timing was initially fortuitous for researchers, providing a large sample of respondents who were coping with major financial concerns. A secondary objective of this study is to determine whether a second set of scale items that includes questions that are more focused on attitudes toward finances may be a useful refinement of the ZTPI for financial decisions.

This study first analyzed the responses to questionnaires distributed in the fall of 2008 through the spring of 2009, by which time most households, or their friends and extended family members, were feeling some effects of the worst worldwide recession since the Great Depression. Median household net worth fell nearly 40% between 2007 and 2010 (Riley, 2012). Corporations reacted too: of cash grew to nearly two trillion dollars of cash, dubbed "scared money" by 2011 (Whitehouse, 2011). This initial study used the standard ZTPI and other questions designed to capture how economic changes affect one's tendency to seek new employment and his/her intention to move assets to safer forms of investment.

Then, in 2010, when the economy started showing strong signs of recovery - except for growing unemployment - a second set of scale items was tested on different respondents, using the same questions from the first model but also including 21 additional questions. These additional questions are based on the ZTPI questions, but their re-wording was designed to focus on time orientation relative to finances. It was expected that these additional questions would provide a refinement for the purpose of this study, and thus would have more explanatory power regarding financial decisions.

One more time, in 2012, when unemployment had leveled off and begun to decline, and as consumer confidence was on the rise, more data were gathered for a further revised model, using 60 questions tailored towards individuals' TPIs applied toward financial issues, including some version of the revised 21 questions distributed in 2010.


Previous studies have advanced our understanding of why some people change jobs and/or careers. Murtagh, Lopes and Lyons' (2012) study supports other-than-rational perspectives of career decision making. Chambers, Benibo and Spencer (2011) examined the usefulness of the theory of planned behavior for explaining the actions individuals intend to take concerning (1) moving funds and (2) changing jobs during a financial crisis. That study's results indicate that the theory of planned behavior substantially explains the intent to move funds but is only moderately useful in predicting job changes.

Time perspective as an explanation for behavior has a long history in the psychology literature. Raju (1980) posited that past-oriented shoppers tend to be rigid and more risk averse, and this is why they tend to not buy on impulse. …

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