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Mental accounting and behavioural hierarchy: Understanding consumer budgeting behaviour
Author(s) -
Xiao Jing Jian,
O'Neill Barbara
Publication year - 2018
Publication title -
international journal of consumer studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.775
H-Index - 71
eISSN - 1470-6431
pISSN - 1470-6423
DOI - 10.1111/ijcs.12445
Subject(s) - hierarchy , mental accounting , consumer behaviour , sample (material) , perspective (graphical) , accounting , business , economics , finance , actuarial science , marketing , computer science , chemistry , chromatography , artificial intelligence , market economy
Budgeting is an important step in consumer finance. Budgeting behaviour is considered a desirable financial behaviour to indicate consumer financial capability. However, systematic research on budgeting behaviour with a large scale national sample is limited. The purpose of this study was to address this research gap and examine characteristics of budgeting behaviour from the perspective of a behavioural hierarchy, which is related to mental accounting. The assumption holds that consumer financial behaviours may be performed in a hierarchical manner along with an increase in economic resources. Using data from the 2015 National Financial Capability Study, evidence suggests that budgeting behaviour is at the lower end of the behavioural hierarchy. This finding has implications for consumer financial professionals.