The influence of Personality and Preferences on Mental Budgeting
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2020-07-07
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en
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Abstract
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.
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Faculteit der Managementwetenschappen