The relationship between perceived peer income and household’s borrowings: the moderating effect of the Big Five personality traits

  • Ruben Welleweerd Ruben Welleweerd

What motivates individuals to incur debt? Previous research indicated that the perceived income of members from one’s social circle has a positive influence on both the likelihood of owning loans as well as the outstanding amount of these loans. An interesting find of which less is known about variables that could possibly moderate this effect. The present study investigates the moderating effect of the big five personality traits on the relationship between perceived peer income and household borrowings. A large household survey of 2154 observations representative for the Dutch population was used to test this proposition. A negative moderating effect of neuroticism and conscientiousness was revealed on the positive association between perceived peer income and the likelihood of owning collaterized debt. Clear theoretical and practical implications are provided, along with possible directions for further research.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.


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