Catherine P. Montalto

Racial differences in investor decision making

Abstract Racial differences in investment behavior are investigated using data from the 1995 Survey of Consumer Finances. Socioeconomic, financial, and attitudinal variables are incorporated in a life-cycle savings model. The impact of all variables is allowed to differ between Black households and White households to understand racial differences in risky asset ownership. We determine that observed racial differences in risky asset ownership are explained by racial differences in the individual determinants of risky asset ownership, not by race in and of itself. Specifically, these differences seem to center on the impact of children and household size. JEL classification: D12; D91; G11; J70

Determinants of planned retirement age

Abstract Determinants of planned retirement age are analyzed. The prediction equation indicates that planned retirement age increases substantially as people get older, and increases somewhat with higher noninvestment income. Social Security reform should recognize that the capacity to continue working and the ability to afford to retire both influence the age at which people plan to retire. The range of planned retirement ages suggests that research on the adequacy of retirement preparation should focus on planned retirement age. Financial planners should consider the finding that planned retirement age increases with age.

Cultural Influences on Chinese Consumers’ Intentions to Purchase Apparel: Test and Extension of the Fishbein Behavioral Intentional Model

There were two objectives of this study: (a) to test the cross-cultural applicability of the Fishbein Behavioral Intentional Model by studying Chinese consumers’ purchase intentions for apparel made in the United States and (b) to examine whether culture could enhance the validity of the model. Parents (N = 2,017) of students in the public school systems of Beijing, Shanghai, and Guangzhou completed usable questionnaires. Attitude toward purchasing apparel made in the United States (Ab) significantly influenced Chinese purchase intentions for that apparel (BI), but subjective norms (SN) did not. The validity of the Fishbein model may be product dependent, with culturally symbolic products influenced by both attitude and subjective norm, and products less culturally symbolic influenced only by attitudes. Adding cultural components to the Fishbein model enhanced its ability to explain purchase intentions.

Mean and pessimistic projections of retirement adequacy

Abstract Retirement adequacy is estimated using a 1995 United States sample of households. Based on mean lognormal portfolio projections and current contribution rates, 52% of households are adequately prepared for retirement. Based on pessimistic projections, only 42% of households are adequately prepared. A regression of the ratio of projected wealth to needs at retirement shows that adequacy increases with stock share (mean projection) and the impact increases with time until retirement. With pessimistic projections, there is no significant relationship between stock share and the adequacy ratio. Planned retirement age and household spending behavior are each significantly related to the adequacy ratio.

Self-Employed Hispanics and Hispanic Wage Earners: Differences in Earnings

The influence of employment sector on the income of Hispanics is examined using data from the 1990 U.S. Decennial Census. Human capital theory is augmented with measures of acculturation, and income equations are estimated separately for self-employed Hispanics and Hispanic wage earners. The results suggest that self-employment offers economic benefits. The importance of acculturation varies by employment sector. Decomposition of the differences in income between self-employed Hispanics and Hispanic wage earners indicates that these income differences are due more to differences in worker characteristics between the two employment sectors than to differences in rates of return to these characteristics.

Hispanic Self-Employment: Does Gender Matter?.

With the increase in female self-employment, there is a need to examine the intersection between race/ethnicity and gender. This study examined whether gender differences in income exist for self-employed Hispanics residing in California using data from the 1990 U.S. decennial census. Theories stressing human capital, social capital, and acculturation were combined and income equations were estimated separately for Hispanic self-employed men and Hispanic self-employed women. The sample consisted of 7,760 Hispanic self-employed persons (64% self-employed men versus 36% self-employed women). Multiple regression analysis suggests income differences in self-employment do exist by gender. For example, having less than a high school education relative to being a high school graduate decreased self-employment income for both men and women, but the effect was larger for men. Furthermore, decomposition analysis suggests income differences between genders are due both to differences in worker characteristics and rates of return to these characteristics.

Factors Related to Financial Stress Among College Students

Many university administrators are concerned that debt loads and other financial concerns are negatively affecting student wellness. This study sought to explore factors related to financial stress among college students through an adaptation model, the Roy Adaptation Model, which is a conceptual framework used in health care applications. Responses from the 2010 Ohio Student Wellness Survey were analyzed using means tests and multivariate logistic regressions. The results show that financial stress is widespread among students – 71% of the sample reported feeling stress from personal finances. The results of the means tests and logistic regressions show that this study successfully identified important financial stressors among college students. Two of the most important financial stressors were not having enough money to participate in the same activities as peers and expecting to have higher amounts of student loan debt at graduation. The results also indicate that students with higher financial self-efficacy and greater financial optimism about the future are significantly less likely to report financial stress. Implications for student life administrators, policymakers, and financial counselors are discussed. Ph.D. Student, Department of Human Sciences, 1787 Neil Avenue, 262 Campbell Hall, Columbus, OH 43210, The Ohio State University, Columbus, OH, U.S., heckman.59@osu.edu. Ph.D. Candidate, Department of Human Sciences, 1787 Neil Avenue, 262 Campbell Hall, Columbus, OH 43210, The Ohio State University, Columbus, OH, U.S., lim.852@osu.edu. Associate Professor, Department of Human Sciences, 1787 Neil Avenue, 115F Campbell Hall, Columbus, OH 43210, The Ohio State University, Columbus, OH, U.S., 614-292-4571, montalto.2@osu.edu

Use of Complementary and Alternative Medicine by Older Adults: An Exploratory Study

Determinants of complementary and alternative medicine (CAM) use and characteristics of users are examined using a sample of 848 adults aged 50 and older from the 2000 Health and Retirement Survey. Logistic regression is used to identify the factors associated with the likelihood of using CAM. Nearly 70% of the respondents use at least one CAM modality, with 44% reporting use of curative CAM and 58% reporting use of preventive/curative CAM. Whites, relative to Blacks, were more likely to use curative and less likely to use preventive/curative CAM. Widowed older adults were more likely to use preventive/curative CAM. Number of limitations in activities of daily living was positively associated with use of both types of CAM. Recommendations are made for improving research on alternative health care utilization, for educating CAM users, and for qualitative studies to gain further insight into factors affecting the use of specific CAM modalities.

The role of impulsivity, cognitive bias, and reasoned action in understanding college student gambling

Factors related to gambling behavior among college students in the USA are examined by applying the theory of reasoned action (TRA) and incorporating the concepts of impulsivity and cognitive bias. This study uses a broader approach to analyze gambling behavior by including financial behavior variables using ordinary least squares (OLS) and logistic regressions. The survey data were collected through a self-administered online questionnaire of college students from 19 colleges and universities in the fall of 2010. With a sample of 5024 college students, a majority of the respondents (84.45%) in this study report that they did not gamble in the last 30 days. The results of multivariate analysis indicate that gambling is related to attitudes toward gambling, cognitive bias toward gambling, subjective norms of family members regarding financial behavior, and impulsivity. Underestimation of financial behavior (cognitive bias toward financial behavior) was found to be associated with only gambling frequency but not gambling propensity.