Financial shocks and worry about the future

Using data from the Health and Retirement Study and the Survey of Consumer Finances, we show that households that experience adverse financial shocks worry more about the adequacy of their financial resources in retirement, even after controlling for the effects of these shocks on overall wealth. We find supporting evidence that suggests that at least part of the increased worry about retirement is due to general pessimism rather than changes in an individual’s own circumstances. Specifically, experiencing idiosyncratic financial shocks is also associated with greater pessimism about the general future of the economy.      

Risk Perception and Worry Related to Adolescents' Judgement of Three Types of Risk

The core aim of this study was to examine determinants of anticipated worry related to three types of risk among adolescents. The participants were Norwegian high‐school students aged 15–19 years (n = 335). They were students at 6 high schools and a total of 15 randomly selected school classes participated in the study. All the students were asked to fill in a self‐completion questionnaire. The response rate was 100 per cent. The participants were shown three video sequences of three‐minute conversations between a person and a listener discussing three risk sources, which each had developed into a problem (drug use, depression, and sexual abuse). The video sequences were shown to the students when they were in their classes. The results showed that there were gender differences in probability assessments as well as in anticipated worry related to the three types of risk. There were also differences in worry depending on the respondent's past experience with an identical or similar problem or risk. In addition to cognitive evaluations, own experience and gender, general worry, social support seeking, anxiety and depression significantly predicted worry. These variables explained 52 per cent of the variance. Worry may be a significant predictor of risk behaviour as well as decisions concerning risks and risk reduction. The results are related to the risk‐as‐feelings hypothesis (Loewenstein, Weber, Hsee and Welch) and other risk decision models are also discussed.     

Micro-entrepreneurship and subjective well-being: Evidence from rural Bangladesh

Microcredit has long been hailed as a powerful tool to promote livelihoods and reduce poverty through entrepreneurship. However, its impacts on people's subjective well-being remain underexplored. We present a unified theoretical framework for analyzing the effect of microcredit-enabled entrepreneurship on overall life satisfaction – a key manifestation of subjective well-being. Empirically, we apply an instrumental variable approach to a unique census-like household survey conducted in three villages of Bangladesh in 2013. In spite of having no direct effects, we find that microcredit borrowing has an indirect negative effect on overall life satisfaction, through increased worry. On a positive note, we find that female micro-borrowers experience an increase in satisfaction with financial security and achievement in life. We also provide evidence that micro-borrowers with higher levels of assets experience an increase in satisfaction with financial security.     

Anticipating a service experience

This paper explores the anticipations consumers have before service experiences. Consumers think ahead about future service experiences and may foresee problems or discomfort. This research examines the strategies consumers engage in to minimize the impact of these anticipated problems or discomforts. Qualitative interviews and the critical incident technique with a content analysis provide the tools of this study. In Study 1, planning and preparation, avoidance and adjustment, and seeking support emerge as three problem-solving behaviors. In Study 2, the same three problem-solving behaviors emerge, while a fourth category, gathering information, also appears. In addition, worry, as an emotional response to perceived risk, provides understanding to service anticipation issues. Social risk plays a particularly important role as well.