Cognitive Abilities and Household Financial Decision Making

Sumit Agarwal, Federal Reserve Bank of Chicago, USA
Bhashkar Mazumder, Federal Reserve Bank of Chicago, USA
This paper explores how different dimensions of cognitive aptitude affect the likelihood of financial mistakes. Two large field databases are used to show that particular forms of cognitive ability matter for specific types of suboptimal behaviors. Implications for an understanding of the factors that lead to long-term economic success are discussed.
[ to cite ]:
Sumit Agarwal and Bhashkar Mazumder (2011) ,"Cognitive Abilities and Household Financial Decision Making", in NA - Advances in Consumer Research Volume 39, eds. Rohini Ahluwalia, Tanya L. Chartrand, and Rebecca K. Ratner, Duluth, MN : Association for Consumer Research, Pages: 179.