Research Article
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Year 2018, Volume: 10 Issue: 2, 0 - 0, 31.12.2018

Abstract

References

  • Ajzen, I. (1991). The theory of planned behaviour. Organizational Behavior and Human Decision Processes, 50(2), 179-211.
  • Bandura, A. (1982). Self-efficacy mechanism in human agency. American Psychologist Journal, 37, 122-147.
  • Beshears, J., Choi, J., Laibson, D. & Madrian, B. (2011). Behavioural economics perspectives on public sector pension plans. Journal of Pension Economics and Finance, 10(2), 315-336.
  • Edvardsson, B., Tronvoll, B. & Gruber, T. (2011). Expanding understanding of service exchange and value co-creation: a social construction approach. Journal of the Academy of Marketing Science, 39(2), 327-339.
  • Field, A. (2013). Discovering statistics using IBM SPSS statistics (4th ed.). London: Pearson publishers.
  • Fünfgeld, B. & Wang, M. (2009). Attitudes and behaviour in everyday finance: evidence from Switzerland. International Journal of Bank Marketing, 27(2), 108- 128.
  • Golubov, A., Petmezas, D. & Travlos, N.G. (2012). When it pays to pay your investment banker: new evidence on the role of financial Advisors in M & As. Journal of Finance, 67(1), 271-311.
  • Grable, J.E. (2000). Financial risk tolerance and additional factors that affect risk taking in everyday money matters. Journal of business and psychology, 14(4), 625-630.
  • Grable, J.E. & Lytton, R.H. (2003). The development of a risk assessment instrument: a follow-up study. Financial Services Review, 12(3), 257-274.
  • Grable, J.E., Cupples, S., Fernatt, F. & Anderson, N. (2013). Evaluating the link between perceived income adequacy and financial satisfaction: a resource-deficit hypothesis approach. Social Indicators Research, 114(3), 1109-1124.
  • Hackethal, A., Haliassos, M. & Jappelli, T. (2012). Financial advisors: a case for babysitters? Journal of Banking & Finance, 36(2), 509-524.
  • Hair, J.F., Black, W.C., Babin, B.J. & Anderson, R.E. (2014). Multivariate data analysis (7th ed.). Harlow: Pearson publishers.
  • Hira, T.K., Rock, W.L. & Loibl, C. (2009). Determinants of retirement planning behaviour and differences by age. International Journal of Consumer Studies, 33(2009), 293-301.
  • Inderst, R. & Ottaviani, R. (2012). How (not) to pay for advice: a framework for consumer financial protection. Journal of Financial Intermediation, 105, 393-411.
  • Ismail, A. (2010). Are good financial advisors really good? the performance of investment banks in the M & A market. Review of Quantitative Finance & Accounting, 35, 411-429.
  • Kahneman, D. & Tversky, A. (1979). Prospect theory: an analysis of decision under risk. Econometrica, 47(2), 263-291.
  • Kaleem, A., Wajid, R.A. & Hussain, H.S. (2009). Factors affecting financial advisor’s perceptions in portfolio Management: with reference to Pakistan. Oxford & Economics Conference Program, June 24-26.
  • Ki, E-J. & Hon, L. (2012). Causal linkages among relationship quality perception, attitude and behavior intention in a membership organization. Corporate communications: an International Journal, 17(2), 187-208.
  • Koning, F.F. & Harbor, W.H. (2013). Investigating retirement ability of high net worth individuals in South Africa. Presented at the Actuarial Society of South Africa’s 2013 Convention 31 October-1 November 2013, Sandton Convention Centre.
  • Litwin, H. & Sapir, E.V. (2009). Perceived income adequacy among older adults in 12 countries: findings from the survey of health, ageing and retirement in Europe. Gerantologist, 49(3), 397-406.
  • Malhotra, N.K., Nunan, D. & Birks, D.F. (2017). Marketing research: an applied approach. (5th ed.). New York, USA: Pearson.
  • Mindra, R. & Moya, M. (2017). Financial self-efficacy: a mediator in advancing financial inclusion, equality, diversity and inclusion. An International Journal, 36(2), 128-149.
  • Modigliani, F. & Brumberg, R. (1980). Utility Analysis and aggregate consumption functions; an attempt at integration. In Modigliani, F. The Collected papers of Franco Modigliani. (Pp. 128-197) (Abel, A. ed.). Cambridge, Massachusetts: The MIT Press.
  • Moorthy, M.K., Chelliah, T.D., Chiau, S.S., Lai, C.L., Ng, Z.K., Wong, C.R. & Wong, Y.T. (2012). A study on the retirement planning behavior of working individuals in Malaysia. International Journal of Academic Research in Economics and Management Sciences, 1(2), 54-72.
  • My, T.N & Truong, H.H. (2011). Herding behaviour in an emerging stock market: empirical evidence from Vietnam. Research Journal of Business Management, 5(2), 51-76.
  • Pallant, J. (2013). SPSS survival manual (5th ed.). New York: McGraw-Hill. Plagerson, S. & Ulriksen, M.S. (2016). The right to social security in South Africa. Working Paper published for the Foundation for Human Rights as an integrated volume In Socio-economic rights - progressive realisation (Pp. 1-32).
  • Ruefenacht, M., Schlager, T., Maas, P. & Puustinen, P. (2015). Drivers of longterm savings behavior from the consumers’ perspective. International Journal of Bank Marketing, 33(7), 922-943.
  • Russell, K. & Stramoski, S. (2011). Financial management practices and attitudes of dental hygienists: a descriptive study. American Dental Hygienists Association, 85(4), 340-347.
  • Sanlam (2018). The Sanlam Benchmarking Survey. https://www.sanlam.co.za/institutional/retirement/benchmarksurvey/Documents/B enchmark-Research-Summary-2018.pdf. Accessed 2018/06/24
  • Shefrin, H.M. & Thaler, R.H. (1988). The behavioral life-cycle hypothesis. Economic Inquiry, 26(4), 609-643.
  • Tabachnick, B.G. & Fidell, L.S. (2014). Using multivariate statistics (6th ed.). Harlow: Pearson publishers.
  • Tavor, T. & Garyn-Tal, S. (2016). Risk tolerance and rationality in the case of retirement savings. Studies in Economics and Finance, 33(4), 688-703.
  • Taylor, M. (2011). Measuring financial capability and its determinants using survey data. Social Indicators Research, 102(2), 297-314.
  • Ting, L. & Kollamparambil, U. (2015). Nature and determinants of household retirement savings behaviour in South Africa. Development Southern Africa, 32(6): 675-696.
  • Tondini, A., Ardington, C., Woolard, I. (2017). Public pensions and elderly informal employment: evidence from a change in retirement age in South Africa. Cape Town: Southern Africa Labour and Development Research Unit, SALDRU Working Paper Number 206. UCT: Cape Town
  • Wang, X. & Wen, Y. (2011). Can rising housing prices explain China’s high household saving rate? Federal Reserve Bank of St. Louis Review, 93(2), 67-87.
  • Wheeler-Brooks, J. & Scanlon, E. (2009). Perceived facilitators and barriers to saving among low-income youth. The Journal of Socio-Economics, 38(5), 757- 763.
  • Xiao, J.J., Chen, C. & Chen, F. (2014). Consumer financial capability and financial satisfaction. Social Indicators Research, 118(1), 415-432.

RATIONAL AND IRRATIONAL INDICATORS OF FINANCIAL EFFICACY AND DESIRABLE SAVINGS BEHAVIOUR AMONG EAST LONDON LOW-INCOME CONSUMERS

Year 2018, Volume: 10 Issue: 2, 0 - 0, 31.12.2018

Abstract

Since the principal source of retirement income is savings, the significance of
projecting desirable savings behaviour during the pre-retirement phase can never
be overestimated. Notably, the majority of low-income consumers in South Africa
are not sufficiently prepared for retirement. This provides fertile ground for
clarifying the importance of positive long-term savings behaviour. This study
aimed to present a composite view by delineating both rational and irrational
markers of financial efficacy and self-reported savings behaviour, whilst
simultaneously discussing how such determinants can be predisposed towards
increasing an individual’s retirement savings rate. Procedural techniques in the
form of multiple regression analysis quantified the impact of financial risk
tolerance, perceived income adequacy and social norms influence on individuals’
efficacy towards long-term savings behaviour. The findings of this study have
practical implications for financial advisors, on how increased financial needs
awareness amongst low-income consumers regarding future retirement life may
be generated. Furthermore, this paper contributes towards the development of
thriving communities by proffering knowledge on enhancing resource utilisation
in lieu of increasing long-term financial security among low-income households. 

References

  • Ajzen, I. (1991). The theory of planned behaviour. Organizational Behavior and Human Decision Processes, 50(2), 179-211.
  • Bandura, A. (1982). Self-efficacy mechanism in human agency. American Psychologist Journal, 37, 122-147.
  • Beshears, J., Choi, J., Laibson, D. & Madrian, B. (2011). Behavioural economics perspectives on public sector pension plans. Journal of Pension Economics and Finance, 10(2), 315-336.
  • Edvardsson, B., Tronvoll, B. & Gruber, T. (2011). Expanding understanding of service exchange and value co-creation: a social construction approach. Journal of the Academy of Marketing Science, 39(2), 327-339.
  • Field, A. (2013). Discovering statistics using IBM SPSS statistics (4th ed.). London: Pearson publishers.
  • Fünfgeld, B. & Wang, M. (2009). Attitudes and behaviour in everyday finance: evidence from Switzerland. International Journal of Bank Marketing, 27(2), 108- 128.
  • Golubov, A., Petmezas, D. & Travlos, N.G. (2012). When it pays to pay your investment banker: new evidence on the role of financial Advisors in M & As. Journal of Finance, 67(1), 271-311.
  • Grable, J.E. (2000). Financial risk tolerance and additional factors that affect risk taking in everyday money matters. Journal of business and psychology, 14(4), 625-630.
  • Grable, J.E. & Lytton, R.H. (2003). The development of a risk assessment instrument: a follow-up study. Financial Services Review, 12(3), 257-274.
  • Grable, J.E., Cupples, S., Fernatt, F. & Anderson, N. (2013). Evaluating the link between perceived income adequacy and financial satisfaction: a resource-deficit hypothesis approach. Social Indicators Research, 114(3), 1109-1124.
  • Hackethal, A., Haliassos, M. & Jappelli, T. (2012). Financial advisors: a case for babysitters? Journal of Banking & Finance, 36(2), 509-524.
  • Hair, J.F., Black, W.C., Babin, B.J. & Anderson, R.E. (2014). Multivariate data analysis (7th ed.). Harlow: Pearson publishers.
  • Hira, T.K., Rock, W.L. & Loibl, C. (2009). Determinants of retirement planning behaviour and differences by age. International Journal of Consumer Studies, 33(2009), 293-301.
  • Inderst, R. & Ottaviani, R. (2012). How (not) to pay for advice: a framework for consumer financial protection. Journal of Financial Intermediation, 105, 393-411.
  • Ismail, A. (2010). Are good financial advisors really good? the performance of investment banks in the M & A market. Review of Quantitative Finance & Accounting, 35, 411-429.
  • Kahneman, D. & Tversky, A. (1979). Prospect theory: an analysis of decision under risk. Econometrica, 47(2), 263-291.
  • Kaleem, A., Wajid, R.A. & Hussain, H.S. (2009). Factors affecting financial advisor’s perceptions in portfolio Management: with reference to Pakistan. Oxford & Economics Conference Program, June 24-26.
  • Ki, E-J. & Hon, L. (2012). Causal linkages among relationship quality perception, attitude and behavior intention in a membership organization. Corporate communications: an International Journal, 17(2), 187-208.
  • Koning, F.F. & Harbor, W.H. (2013). Investigating retirement ability of high net worth individuals in South Africa. Presented at the Actuarial Society of South Africa’s 2013 Convention 31 October-1 November 2013, Sandton Convention Centre.
  • Litwin, H. & Sapir, E.V. (2009). Perceived income adequacy among older adults in 12 countries: findings from the survey of health, ageing and retirement in Europe. Gerantologist, 49(3), 397-406.
  • Malhotra, N.K., Nunan, D. & Birks, D.F. (2017). Marketing research: an applied approach. (5th ed.). New York, USA: Pearson.
  • Mindra, R. & Moya, M. (2017). Financial self-efficacy: a mediator in advancing financial inclusion, equality, diversity and inclusion. An International Journal, 36(2), 128-149.
  • Modigliani, F. & Brumberg, R. (1980). Utility Analysis and aggregate consumption functions; an attempt at integration. In Modigliani, F. The Collected papers of Franco Modigliani. (Pp. 128-197) (Abel, A. ed.). Cambridge, Massachusetts: The MIT Press.
  • Moorthy, M.K., Chelliah, T.D., Chiau, S.S., Lai, C.L., Ng, Z.K., Wong, C.R. & Wong, Y.T. (2012). A study on the retirement planning behavior of working individuals in Malaysia. International Journal of Academic Research in Economics and Management Sciences, 1(2), 54-72.
  • My, T.N & Truong, H.H. (2011). Herding behaviour in an emerging stock market: empirical evidence from Vietnam. Research Journal of Business Management, 5(2), 51-76.
  • Pallant, J. (2013). SPSS survival manual (5th ed.). New York: McGraw-Hill. Plagerson, S. & Ulriksen, M.S. (2016). The right to social security in South Africa. Working Paper published for the Foundation for Human Rights as an integrated volume In Socio-economic rights - progressive realisation (Pp. 1-32).
  • Ruefenacht, M., Schlager, T., Maas, P. & Puustinen, P. (2015). Drivers of longterm savings behavior from the consumers’ perspective. International Journal of Bank Marketing, 33(7), 922-943.
  • Russell, K. & Stramoski, S. (2011). Financial management practices and attitudes of dental hygienists: a descriptive study. American Dental Hygienists Association, 85(4), 340-347.
  • Sanlam (2018). The Sanlam Benchmarking Survey. https://www.sanlam.co.za/institutional/retirement/benchmarksurvey/Documents/B enchmark-Research-Summary-2018.pdf. Accessed 2018/06/24
  • Shefrin, H.M. & Thaler, R.H. (1988). The behavioral life-cycle hypothesis. Economic Inquiry, 26(4), 609-643.
  • Tabachnick, B.G. & Fidell, L.S. (2014). Using multivariate statistics (6th ed.). Harlow: Pearson publishers.
  • Tavor, T. & Garyn-Tal, S. (2016). Risk tolerance and rationality in the case of retirement savings. Studies in Economics and Finance, 33(4), 688-703.
  • Taylor, M. (2011). Measuring financial capability and its determinants using survey data. Social Indicators Research, 102(2), 297-314.
  • Ting, L. & Kollamparambil, U. (2015). Nature and determinants of household retirement savings behaviour in South Africa. Development Southern Africa, 32(6): 675-696.
  • Tondini, A., Ardington, C., Woolard, I. (2017). Public pensions and elderly informal employment: evidence from a change in retirement age in South Africa. Cape Town: Southern Africa Labour and Development Research Unit, SALDRU Working Paper Number 206. UCT: Cape Town
  • Wang, X. & Wen, Y. (2011). Can rising housing prices explain China’s high household saving rate? Federal Reserve Bank of St. Louis Review, 93(2), 67-87.
  • Wheeler-Brooks, J. & Scanlon, E. (2009). Perceived facilitators and barriers to saving among low-income youth. The Journal of Socio-Economics, 38(5), 757- 763.
  • Xiao, J.J., Chen, C. & Chen, F. (2014). Consumer financial capability and financial satisfaction. Social Indicators Research, 118(1), 415-432.
There are 38 citations in total.

Details

Primary Language English
Journal Section Research Article
Authors

Sibanisezwe Alwyn Khumalo This is me

Nobukhosi Dlodlo This is me

Publication Date December 31, 2018
Published in Issue Year 2018 Volume: 10 Issue: 2

Cite

APA Khumalo, S. A., & Dlodlo, N. (2018). RATIONAL AND IRRATIONAL INDICATORS OF FINANCIAL EFFICACY AND DESIRABLE SAVINGS BEHAVIOUR AMONG EAST LONDON LOW-INCOME CONSUMERS. International Journal of Business and Management Studies, 10(2).
AMA Khumalo SA, Dlodlo N. RATIONAL AND IRRATIONAL INDICATORS OF FINANCIAL EFFICACY AND DESIRABLE SAVINGS BEHAVIOUR AMONG EAST LONDON LOW-INCOME CONSUMERS. IJBMS. December 2018;10(2).
Chicago Khumalo, Sibanisezwe Alwyn, and Nobukhosi Dlodlo. “RATIONAL AND IRRATIONAL INDICATORS OF FINANCIAL EFFICACY AND DESIRABLE SAVINGS BEHAVIOUR AMONG EAST LONDON LOW-INCOME CONSUMERS”. International Journal of Business and Management Studies 10, no. 2 (December 2018).
EndNote Khumalo SA, Dlodlo N (December 1, 2018) RATIONAL AND IRRATIONAL INDICATORS OF FINANCIAL EFFICACY AND DESIRABLE SAVINGS BEHAVIOUR AMONG EAST LONDON LOW-INCOME CONSUMERS. International Journal of Business and Management Studies 10 2
IEEE S. A. Khumalo and N. Dlodlo, “RATIONAL AND IRRATIONAL INDICATORS OF FINANCIAL EFFICACY AND DESIRABLE SAVINGS BEHAVIOUR AMONG EAST LONDON LOW-INCOME CONSUMERS”, IJBMS, vol. 10, no. 2, 2018.
ISNAD Khumalo, Sibanisezwe Alwyn - Dlodlo, Nobukhosi. “RATIONAL AND IRRATIONAL INDICATORS OF FINANCIAL EFFICACY AND DESIRABLE SAVINGS BEHAVIOUR AMONG EAST LONDON LOW-INCOME CONSUMERS”. International Journal of Business and Management Studies 10/2 (December 2018).
JAMA Khumalo SA, Dlodlo N. RATIONAL AND IRRATIONAL INDICATORS OF FINANCIAL EFFICACY AND DESIRABLE SAVINGS BEHAVIOUR AMONG EAST LONDON LOW-INCOME CONSUMERS. IJBMS. 2018;10.
MLA Khumalo, Sibanisezwe Alwyn and Nobukhosi Dlodlo. “RATIONAL AND IRRATIONAL INDICATORS OF FINANCIAL EFFICACY AND DESIRABLE SAVINGS BEHAVIOUR AMONG EAST LONDON LOW-INCOME CONSUMERS”. International Journal of Business and Management Studies, vol. 10, no. 2, 2018.
Vancouver Khumalo SA, Dlodlo N. RATIONAL AND IRRATIONAL INDICATORS OF FINANCIAL EFFICACY AND DESIRABLE SAVINGS BEHAVIOUR AMONG EAST LONDON LOW-INCOME CONSUMERS. IJBMS. 2018;10(2).