The influence of Personality and Preferences on Mental Budgeting

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This research aimed to find out how personality traits, economic preferences and locus of control affect mental budgeting. The Big Five personality traits, the economic preferences time orientation and risk aversion, and locus of control were expected to be determinants of mental budgeting. It has been studied by quantitative research in the form of an online survey. The survey was distributed via snowball sampling and social media. In total, 149 respondents completed the survey without missing data. Multiple regression was conducted to analyze the data. Besides testing the hypotheses, a mediation analysis was conducted for analyzing the indirect effects of personality traits on mental budgeting, mediated by economic preferences. Also, ordinal regression was used to analyze the effect of mental budgeting on making ends meet. The results showed that risk aversion, time orientation and neuroticism had (small) significant direct effects on mental budgeting. Also, extraversion had an indirect significant effect on mental budgeting, mediated by risk aversion. Furthermore, the results showed that extraversion, conscientiousness and neuroticism were significant predictors of risk aversion and that conscientiousness was a significant predictor of time orientation as well. The other expectations derived from theory were not met. The thesis concludes with several explanations for the significant and non-significant results regarding the hypotheses, and some future research suggestions are discussed.
Faculteit der Managementwetenschappen