WHY DO PEOPLE SAVE? THE SALIENCE OF IDENTITY IN SAVINGS BEHAVIOR

According to a 2016 consumer survey, one in three Americans has no retirement savings, and 56 percent have less than $10,000 saved. Using longitudinal panel data of 4,800 households in the United States, a Capstone team sought to understand the underlying motivations of why people save. The team examined the savings behavior of people who consistently self-identify as planners or non-planners and savers or spenders-measured by having a savings device as well as the amount of savings. The team's findings indicated that there is a significant difference in savings behavior between planners and non-planners but no difference between savers and spenders, suggesting the planner identity may be a salient force in savings behavior. This analysis contributes to the multi-disciplinary temporal decision-making literature by applying behavioral theory to a vast and longitudinal real-world dataset. The research also has significant implications for policymakers and other actors involved in creating interventions that promote savings behavior.