Thinking about financial deprivation: Rumination and decision making among the poor
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johar2015 - p. 1
financial rumination, or the tendency towards repetitive, persistent thoughts about a focal stressor (i.e., poverty) and its causes and consequences
johar2015 - p. 4
Confronting life’s demands invariably motivates efforts to cope with the cognitive and emotional strains they summon (Lazarus and Folkman 1984). One way that people cope with chronic stressors is through rumination, defined as “a mode of responding to distress that involves repetitively and passively focusing on symptoms of distress and on the possible causes and consequences of these symptoms” (Nolen-Hoeksema 1991).
johar2015 - p. 5
Prior research has distinguished between two subtypes of ruminative thinking: reflection, which involves a more adaptive, contemplative state, and brooding, characterized by a perseverative focus on self-related negative thoughts and widely regarded as a maladaptive process (Treynor, Gonzalez, and Nolen-Hoeksema 2003).
johar2015 - p. 7
Participants and design. We recruited 207 paid U.S. respondents from Amazon Mechanical Turk (MTurk) with at least a 96% approval rating.
johar2015 - p. 8
Respondents first reported their annual household income (ranging from below 200,000 or above in increments of $20,000) among other basic demographic questions (e.g., age and gender). Then, participants completed a “personality questionnaire” that included a rumination measure, among other embedded individual differences. To capture rumination, we administered a trait measure adapted for finances (Scott and McIntosh 1999; Wade et al. 2008; see appendix 1)
johar2015 - p. 8
Participants next completed a “financial experiences” section that asked them about their past financial behaviors such as recent loan activity and spending patterns. We selected these measures from the Survey of Consumer Finances (Federal Reserve 2013) and the National Financial Capability Study (FINRA Investor Education Foundation 2012). Included in the section were items asking whether participants had borrowed money or purchased products within the past five years from five different sources that tend to charge high-interest rates: an auto title loan, a payday loan, a refund anticipation loan, a pawn shop, and a rent-to-own store.
johar2015 - p. 11
In the gain frame, participants decided between receiving a reward of 525 and 500 today and the same eleven larger sums of money in six months.
johar2015 - p. 11
myopic behavior was represented by a greater preference for smallersooner rewards in the gain scenario but a lower preference for smaller-sooner payments in the loss scenario
johar2015 - p. 12
ext, in a “personality questionnaire” section, we administered the measure of chronic financial rumination used in the pilot study (α = .88).
johar2015 - p. 14
The rumination × frame interaction negatively predicted the number of smaller-sooner options (B = -1.25, SE = .34, 95% CI [-1.93, -.58]). Holding constant income, a unit increase in rumination increased the number of smaller-sooner options chosen by 1.85 units, while exposure to the loss relative to gain frame (1 = loss, 0 = gain) increased the number of smaller-sooner options by 9.03 units.
johar2015 - p. 14
The conditional indirect path confirms that in the gain frame, rumination positively predicted the number of smaller-sooner choices (indirect effect = .26, SE = .12, 95% CI [.047, .55]; direct effect = .61, SE = .39, 95% CI [-.15, 1.37]), while in the loss frame, rumination negatively predicted the number of smallersooner choices (indirect effect = -.29, SE = .11, 95% CI [-.56, -.09]; direct effect = -.024, SE = .42, 95% CI [-.86, .81]).
johar2015 - p. 15
ne way to inhibit ruminative thinking is by distraction, or diverting people’s attention from the source of stress (Martin and Tesser 1996). Distraction inductions that shift focus away from negative thoughts have found success in attenuating many undesirable outcomes associated with chronic rumination, such as lifting mood among depressed patients (Nolen-Hoeksema and Morrow 1993).
johar2015 - p. 19
Participants first reported their household income and other baseline demographics.
johar2015 - p. 20
Before indicating their debt preferences, those in the social support condition first read the following prompt: Please think about people in your life with whom you currently have a confiding relationship. By confiding, we mean people you are very close to whom you would feel comfortable discussing personal matters with, including your financial concerns and issues.
johar2015 - p. 20
Afterwards, respondents completed a manipulation check where they rated their agreement on four items (1 = Strongly disagree; 7 = Strongly agree; α = .87) pertaining to the strength of their social support networks (adapted from Zimet et al. 1988): “I have a strong social support network,” “I have several people I can talk to about my problems,” “I feel that there is no one I can share my most private worries and fears with,” and “There are people who are around when I am in need.”
johar2015 - p. 20
Forty-two percent of respondents reported a household income below $40,000