Patrick Gerhard|Joe J. Gladstone|Arvid O. I. Hoffmann
Psychological characteristics and household savings behavior: The importance of accounting for latent heterogeneity
Network for Studies on Pensions, Aging and Retirement|Maastricht University|University College London|Network for Studies on Pensions, Aging and Retirement|University of Adelaide
employ finite mixture model maximum likelihood ml estimation analyze latent heterogeneity relationship psychological characteristics household savings behavior onestep ml estimation approach estimate class membership model behavioral model classes jointly adopting approach enables us simultaneously assess sociodemographic characteristics affect class membership probabilities estimate classspecific regression coefficients test whether psychological characteristics predict savings behavior differently across latent classes apply approach representative sample uk households n 3382 identify two different latent classes striving versus established households find relationship psychological characteristics savings behavior differs across two classes demonstrating importance accounting latent heterogeneity studying drivers savings behavior results implications policymakers attempting improve household savings behavior