Advertisement

The Life Course Research Framework: Illustrative Application in the Study of Financial Behaviors

  • George P. Moschis
Chapter

Abstract

Research efforts in the field of personal finance are yet to benefit from recent theoretical and methodological developments in behavioral and social sciences that have advanced the life course paradigm as the leading research framework for studying behavior over time (e.g., Colby 1998; Elder et al. 2003; George 2003; Mayer and Tuma 1990). For example, although this multi-theoretical paradigm is mentioned as a viable research framework for the study of behavioral and mental changes that surround the critical life event of retirement and the impact of these changes on psychological well-being (Hershey and Henkens 2013), there is limited research on the experienced and expected consequences of this transition on the individual’s financial behaviors. Similarly, models of financial behavior that attempt to incorporate life course theory and concepts (e.g., Hershey et al. 2010) are void of many key elements of the life course paradigm. For example, although the life course “principles” of time and timing have important implications for the development of financial solvency (Hershey and Jacobs-Lawson 2012), they are absent from recent multi-theoretical formulations (e.g., Hershey et al. 2010). Another drawback in previous research efforts is inherent in the analytic methods commonly used (e.g., regression, probit, logit, discriminant), as such methods not only are inferior to more recently developed analytic models, collectively known as “event history analysis” (EHA) (e.g., Frazer et al. 1994; Mayer and Tuma 1990), but also inappropriate for analyzing development and changes of behavior. The latter methods have facilitated the development of the life course approach as the leading research framework (Mayer and Tuma 1990) that is considered one of the most important achievements of social science and behavioral sciences (Colby 1998).

References

  1. Andreasen, A. R. (1984). Life status changes and changes in consumer preferences and satisfaction. Journal of Consumer Research, 11(3), 784–794.CrossRefGoogle Scholar
  2. Balkwell, C. (1985). An attitudinal correlate of the timing of a major life event: The case of morale in widowhood. Family Relations, 34(4), 577–581.CrossRefGoogle Scholar
  3. Bandura, A. (1977). Social learning theory. Englewood Cliffs, NJ: Prentice Hall.Google Scholar
  4. Barnhart, M., & Peñaloza, L. (2013). Who are you calling old? Negotiating old age identity in the elderly consumption ensemble. Journal of Consumer Research, 39(6), 1133–1153.CrossRefGoogle Scholar
  5. Beehr, T. A. (1986). The process of retirement: A review and recommendations for future investigations. Personnel Psychology, 39(1), 31–55.CrossRefGoogle Scholar
  6. Bolger, N., Avshalom, C., Downey, G., & Moorehouse, M. (1988). Persons in context: Developmental processes. Cambridge: Cambridge University.Google Scholar
  7. Chatters, L. M., & Taylor, R. J. (1989). Life problems and coping strategies of older black adults. Social Work, 34(4), 313–319.CrossRefGoogle Scholar
  8. Cobb-Clark, D. A., Kassenboehmer, S. C., & Sinning, M. (2013). Locus of control and savings. Ruhr Economic Paper No. 455. Available at SSRN. Retrieved from https://ssrn.com/abstract=2383804 or doi: https://doi.org/10.2139/ssrn.2383804.
  9. Cohen, L. H. (1988). Life events and psychological functioning. Newbury Park, CA: Sage.Google Scholar
  10. Colby, A. (1998). Foreword: Crafting life course studies. In J. A. Giele & G. H. Elder (Eds.), Methods of life course research: Qualitative and quantitative approaches. Thousand Oaks, CA: Sage.Google Scholar
  11. Coleman, J. (1990). Foundations of social theory. Cambridge, MA: The Belknap Press of Harvard University Press.Google Scholar
  12. Connell, P. M., Brucks, M., & Nielsen, J. H. (2014). How children advertising exposure can create biased product evaluations that persist into adulthood. Journal of Consumer Research, 41(1), 119–134.CrossRefGoogle Scholar
  13. Denton, M. A., Kemp, C. L., French, S., Gafni, A., Joshi, A., Rosenthal, C. J., & Davies, S. (2004). Reflexive planning for later life. Canadian Journal on Aging Supplement, 23(Suppl 1), S71–S82.CrossRefGoogle Scholar
  14. Durante, K. M., & Laran, J. (2016). The effects of stress on consumer saving and spending. Journal of Marketing Research, 53(5), 814–828.CrossRefGoogle Scholar
  15. Elder, G. H. (1994). Time, human agency, and social change: Perspectives on the life course. Social Psychology Quarterly, 57(1), 4–15.CrossRefGoogle Scholar
  16. Elder, G. H. (1998). Life course and human development. In W. Damon & R. Lerner (Eds.), Handbook of child psychology (pp. 939–991). New York: Wiley.Google Scholar
  17. Elder, G. H., & Kirkpatrick, M. J. (2002). The life course and aging: Challenges, lessons, and new directions. In R. A. Settersen (Ed.), Invitation to the life course: Toward new understanding of later life, part II (pp. 49–81). Amityville, NY: Baywood.Google Scholar
  18. Elder, G. H., George, L. K., & Shanahan, M. J. (1996). Psychosocial stress over the life course. In H. B. Kaplan (Ed.), Psychosocial stress: Perspectives on structure, theory, life course, and methods (pp. 247–292). Orlando: Academic Press.Google Scholar
  19. Elder, G. H., Johnson, M. K., & Crosnoe, R. (2003). The emergence and development of life course theory. In J. T. Mortimer & M. J. Shanahan (Eds.), Handbook of the life course (pp. 3–19). New York: Plenum.CrossRefGoogle Scholar
  20. Epp, A., & Price, L. L. (2008). Family identity: A framework of identity interplay in consumption practices. Journal of Consumer Research, 35(1), 50–70.CrossRefGoogle Scholar
  21. Faber, R. J., & Christenson, G. A. (1996). In the mood to buy: Differences in the mood states experienced by compulsive buyers and other consumers. Psychology & Marketing, 13(8), 803–819.CrossRefGoogle Scholar
  22. Featherman, D. L., & Lerner, R. M. (1985). Ontogenesis and sociogenesis: Problematics for theory and research about development and socialization across the lifespan. American Sociological Review, 50(October), 659–676.CrossRefGoogle Scholar
  23. Ferraro, K. F., & Su, Y. (1999). Financial strain, social relations, and psychological distress among older people: A cross-cultural analysis. Journal of Gerontology, 54B(1), S3–S15.CrossRefGoogle Scholar
  24. Frazer, M. W., Jenson, J. M., Kiefer, D., & Popuang, C. (1994). Statistical methods for the analysis of critical life events. Social Work Research, 18(3), 163–177.CrossRefGoogle Scholar
  25. Gentry, J. W., Kennedy, P. F., Paul, C., & Hill, R. P. (1995). Family transitions during grief: Discontinuities in household consumption patterns. Journal of Business Research, 34(1), 67–79.CrossRefGoogle Scholar
  26. George, L. K. (1993). Financial security in later life: The subjective side. Philadelphia: Boettner Institute of Financial Gerontology.Google Scholar
  27. George, L. K. (2003). Life course research: Achievements and potential. In J. T. Mortimer & M. J. Shanahan (Eds.), Handbook of the life course (pp. 671–680). New York: Plenum.CrossRefGoogle Scholar
  28. Giele, J. Z., & Elder, G. H. (1998). Life course research: Development of a field. In J. Z. Giele & G. H. Elder (Eds.), Methods of life course research: Qualitative and quantitative approaches (pp. 5–27). Thousand Oaks, CA: Sage.CrossRefGoogle Scholar
  29. Gonyea, J. G. (2007). Improving the retirement prospects of lower wage workers in a defined contribution world. Family in Societies, 88(3), 53–62.Google Scholar
  30. Gould, S., Considine, J. M., & Oakes, L. S. (1993). Consumer illness careers: An investigation of allergy sufferers and their universe of medical choices. Journal of Health Care Marketing, 13(2), 34–48.Google Scholar
  31. Gray, J. A. (1987). The psychology of fear and stress. Cambridge: Cambridge University Press.Google Scholar
  32. Gudmunson, C. G., & Danes, S. M. (2011). Family financial socialization: Theory and critical review. Journal of Family Economic Issues, 32(4), 644–667.CrossRefGoogle Scholar
  33. Heckhausen, J., & Schulz, R. (1995). A life-span theory of control. Psychological Review, 102(2), 284–304.CrossRefGoogle Scholar
  34. Hershey, D. A., & Henkens, K. (2013). Impact of different types of retirement transitions on perceived satisfaction with life. The Gerontologist, 54(2), 232–244.CrossRefGoogle Scholar
  35. Hershey, D. A., & Jacobs-Lawson, J. M. (2009). Goals for retirement: Content, structure and process. In R. R. Brougham (Ed.), New directions in aging research (pp. 167–186). Hauppauge, NY: Nova Science.Google Scholar
  36. Hershey, D. A., & Jacobs-Lawson, J. M. (2012). Bridging the gap: Anticipated shortfalls in future retirement. Journal of Family Economic Issues, 30(3), 306–314.CrossRefGoogle Scholar
  37. Hershey, D. A., & Mowen, J. C. (2000). Psychological determinants of financial preparedness for retirement. The Gerontologist, 40(6), 687–697.CrossRefGoogle Scholar
  38. Hershey, D., Walsh, D. A., Brougham, R., Carter, S., & Farrell, A. (1998). Challenges of training pre-retirees to make sound financial planning decisions. Educational Gerontology, 24(5), 447–470.CrossRefGoogle Scholar
  39. Hershey, D. A., Jacobs-Lawson, J. M., McArdle, J. J., & Hamagami, F. (2007). Psychological foundations of financial planning for retirement. Journal of Adult Development, 14(1–2), 26–36.CrossRefGoogle Scholar
  40. Hershey, D. A., Henkens, K., & Van Dalen, H. P. (2010). Aging and financial planning for retirement: Interdisciplinary influences viewed through a cross-cultural lens. International Journal of Aging and Human Development, 70(1), 1–38.CrossRefGoogle Scholar
  41. Hershey, D. A., Jacobs-Lawson, J. M., & Austin, J. T. (2013). Effective financial planning for retirement. In M. Wang (Ed.), Oxford library of psychology. The Oxford handbook of retirement (pp. 402–430). New York: Oxford University Press.Google Scholar
  42. Hetherington, E. M., & Baltes, P. B. (1988). Child psychology and life-span development. In E. M. Hetherington, R. M. Lerner, & M. Purlmutter (Eds.), Child development life-span perspective (pp. 1–19). Hillsdale, NJ: Lawrence Erlbaum Associates.Google Scholar
  43. Jacobs-Lawson, J. M., & Hershey, D. A. (2003). Perceptions of financial stability in retirement: Do Americans really know what to expect? Advances in Psychology Research, 22, 123–136.Google Scholar
  44. Jacobs-Lawson, J. M., & Hershey, D. A. (2005). Influence of future time perspective, financial knowledge, and financial risk tolerance on retirement saving behavior. Financial Services Review, 14, 331–344.Google Scholar
  45. Jacobs-Lawson, J. M., Hershey, D. A., & Neukam, K. A. (2004). Gender differences in factors that influence time spent planning for retirement. Journal of Women and Aging, 16(3–4), 55–69.CrossRefGoogle Scholar
  46. John, D. R. (1999). Consumer socialization of children: A retrospective look at twenty-five years of research. Journal of Consumer Research, 26(3), 183–213.CrossRefGoogle Scholar
  47. Joo, S.-H., & Grable, J. E. (2000). Retirement investment and savings decision model: Influencing factors and outcomes. Consumer Interests Annual, 46, 43–48.Google Scholar
  48. Kiso, H., & Hershey, D. A. (2014). Age differences in expected satisfaction with life in retirement. International Journal of Aging and Human Development, 78(2), 93–114.CrossRefGoogle Scholar
  49. Klontz, B., Britt, S. L., Archuleta, K. L., & Klontz, T. (2012). Disordered money behaviors: Development of the Klontz money behavior inventory. The Journal of Financial Therapy, 3(1), 17–42.CrossRefGoogle Scholar
  50. Knight, B. G., & Sayegh, P. (2010). Cultural values and caregiving: The updated sociocultural stress and coping model. Journal of Gerontology, 65B, 4–13.Google Scholar
  51. Koposko, J. L., Kiso, H., Hershey, D. A., & Gerrans, P. (2016). Perceptions of retirement savings relative to peers. Work, Aging and Retirement, 2(1), 65–72.Google Scholar
  52. Lee, E., Moschis, G. P., & Mathur, A. (2001). Life events and changes in patronage preferences. Journal of Business Research, 54(1), 25–38.CrossRefGoogle Scholar
  53. Lusardi, A., & Mitchell, O. S. (2007a). Financial literacy and retirement preparedness: Evidence and implications for financial education. Business Economics, 42(1), 35–44.CrossRefGoogle Scholar
  54. Lusardi, A., & Mitchell, O. S. (2007b). Baby boomer retirement security: The roles of planning, financial literacy, and housing wealth. Journal of Monetary Economics, 54(1), 205–224.CrossRefGoogle Scholar
  55. Mathur, A., Moschis, G. P., & Lee, E. (2008). A longitudinal study of the effects of life status changes on changes in consumer preferences. Journal of the Academy of Marketing Science, 36(2), 234–246.CrossRefGoogle Scholar
  56. Mayer, K. U., & Tuma, N. B. (1990). Life course research and event history analysis: An overview. In K. U. Mayer & N. B. Tuma (Eds.), Event history analysis in life course research (pp. 3–20). Madison, WI: University of Wisconsin Press.Google Scholar
  57. McAlexander, J., Schouten, J. W., & Roberts, S. D. (1993). Consumer behavior and divorce. In J. A. Costa & R. W. Belk (Eds.), Research in consumer behavior (Vol. 6, pp. 153–184). Greenwich, CT: JAI Press.Google Scholar
  58. Mittal, C., & Griskevicius, V. (2016). Silver spoons and platinum plans: How childhood environment affects adult. Journal of Consumer Research, 43(4), 636–656.CrossRefGoogle Scholar
  59. Modigliani, F., & Brumberg, R. (1954). Utility analysis and the consumption function: An interpretation of cross-section data. In K. Kurihara (Ed.), Post Keynesian economics (pp. 388–436). New Brunswick: Rutgers University Press.Google Scholar
  60. Moen, P. (2003). Midcourse: Navigating retirement and a new life stage. In J. Mortimer & M. J. Shanahan (Eds.), Handbook of the life course (pp. 267–291). New York: Kluwer Academic/Plenum.Google Scholar
  61. Mortimer, J. T., & Simmons, R. G. (1978). Adult socialization. Annual Review of Sociology, 4(Aug), 421–454.CrossRefGoogle Scholar
  62. Moschis, G. P. (2007). Stress and consumer behavior. Journal of the Academy of Marketing Science, 35(3), 430–344.CrossRefGoogle Scholar
  63. Moschis, G. P., & Churchill, G. A. (1978). Consumer socialization: A theoretical and empirical analysis. Journal of Marketing Research, 15(4), 599–609.CrossRefGoogle Scholar
  64. Moschis, G. P., Hun, E., Mathur, A., & Strautman, J. (2000). The maturing marketplace. Westport, CT: Quorum Books.Google Scholar
  65. Murphy, J. L. (2013). Psychosocial factors and financial literacy. Social Security Bulletin, 73(1), 73–81.Google Scholar
  66. Murrell, S. A., Norris, F. H., & Grote, C. (1988). Life events in older adults. In L. H. Cohen (Ed.), Life events and psychological functioning (pp. 96–122). Newbury Park, CA: Sage.Google Scholar
  67. Netemeyer, R. G., Warmath, D., Fernandes, D., & Lynch, J., Jr. (2018). How am I doing? Perceived financial well-being, its potential antecedents, and its relation to overall well-being. Journal of Consumer Research, 45(1), 68–89.CrossRefGoogle Scholar
  68. Neukam, K. A., & Hershey, D. A. (2003). Financial inhibition, financial activation, and saving for retirement. Financial Services Review, 12(1), 19–37.Google Scholar
  69. Norris, F. H., & Uhl, G. A. (1993). Chronic stress as a mediator of acute stress: The case of hurricane Hugo. Journal of Applied Social Psychology, 23(16), 1263–1284.CrossRefGoogle Scholar
  70. NSPC. (2013). The role of financial literacy and financial adviser anxiety in older Australians’ advice seeking. National Seniors Productive Ageing Center Department of Health and Ageing, Government of Australia.Google Scholar
  71. Ntalianis, M., & Wise, V. (2010). The relevance of financial education for retirement savings behavior. International Review of Business Research, 6(1), 631–645.Google Scholar
  72. O’Bryant, S. L., & Morgan, L. A. (1989). Financial experience and well-being among mature widowed women. The Gerontologist, 29(2), 245–251.CrossRefGoogle Scholar
  73. O’Guinn, T. C., & Faber, R. (1991). Mass communication and consumer behavior. In T. S. Robertson & H. H. Kassarjian (Eds.), Handbook of consumer behavior (pp. 349–400). Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
  74. Oropesa, R. S. (1993). Female labor force participation and time-saving household technology: A case of the microwave from 1978-1989. Journal of Consumer Research, 19(4), 567–579.CrossRefGoogle Scholar
  75. Pearlin, L. (1989). The sociological study of stress. Journal of Health and Social Behavior, 30(3), 241–256.CrossRefGoogle Scholar
  76. Peng, T. M., Bartholomae, S., Fox, J. J., & Cravener, G. (2007). The impact of personal finance education delivered in high school and college courses. Journal of Family and Economic Issues, 28(2), 265–284.CrossRefGoogle Scholar
  77. Rothbaum, F., Weisz, J. R., & Snyder, S. S. (1982). Changing the world and changing the self: A two-process model of perceived control. Journal of Personality and Social Psychology, 42(1), 5–37.CrossRefGoogle Scholar
  78. Rutter, M. (1996). Transitions and turning points in developmental psychopathology: As applied to the age span between childhood and mid-adulthood. International Journal of Behavioral Development, 19(3), 603–626.CrossRefGoogle Scholar
  79. Schaninger, C. M., & Danko, W. D. (1993). A conceptual and empirical family comparison of alternative household life cycle models. Journal of Consumer Research, 19(4), 580–594.CrossRefGoogle Scholar
  80. Schau, H. J., Gilly, M. C., & Wolfinbarger, M. (2009). Consumer identity renaissance: The resurgence of identity-inspired consumption in retirement. Journal of Consumer Research, 36(2), 255–276.CrossRefGoogle Scholar
  81. Schouten, J. W. (1991). Selves in transition: Symbolic consumption in personal rites of passage and identity reconstruction. Journal of Consumer Research, 17(4), 412–425.CrossRefGoogle Scholar
  82. Serido, J., Curran, M. J., Wilmarth, M., Ahn, S. Y., Shim, S., & Ballard, J. (2015). The unique role of parents and romantic partners on college students’ financial attitudes and behaviors. Family Relations, 64(5), 696–710.CrossRefGoogle Scholar
  83. Strahilevitz, M. A., & Loewenstein, G. (1998). The effect of ownership history on the valuation of objects. Journal of Consumer Research, 25(3), 276–289.CrossRefGoogle Scholar
  84. Sundarasen, S. D., Rahman, M. S., Pthman, M. S., & Danaraj, J. (2016). Impact of financial literacy, socialization agents and parental norms on money management. Journal of Business Studies Quarterly, 8(1), 140–156.Google Scholar
  85. Tausig, M. (1982). Measuring life events. Journal Health and Social Behavior, 23(1), 52–64.CrossRefGoogle Scholar
  86. Thoits, P. A. (1995). Stress, coping, and social support processes: Where are we? What next? Journal of Health and Social Behavior, 36(Extra issue), 53–79.CrossRefGoogle Scholar
  87. Von Gaudecker, H. M. (2015). How does household portfolio diversification vary with financial literacy and financial advice? The Journal of Finance, 70(2), 1–21.CrossRefGoogle Scholar
  88. Wagner, J., & Hanna, S. (1983). The effectiveness of life cycle variables in consumer expenditure research. Journal of Consumer Research, 10(3), 281–291.CrossRefGoogle Scholar
  89. Wells, W. D. (1993). Discovery-oriented consumer research. Journal of Consumer Research, 19(4), 489–504.CrossRefGoogle Scholar
  90. Wheaton, B. (1990). Life transitions, role histories, and mental health. American Sociological Review, 55(2), 209–223.CrossRefGoogle Scholar
  91. White, J. M., & Klein, M. D. (2002). Family theories (2nd ed.). Thousand Oaks, CA: Sage.Google Scholar
  92. Williams, P., & Drolet, A. (2005). Age-related differences in responses to emotional advertisements. Journal of Consumer Research, 32(3), 343–354.CrossRefGoogle Scholar
  93. Woodyard, A., & Robb, C. (2012). Financial knowledge and the gender gap. The Journal of Financial Therapy, 3(1), 1–16.CrossRefGoogle Scholar
  94. Yang, Y. (2008). Social inequalities in happiness in the United States, 1972 to 2004: An age-period-cohort analysis. American Sociological Review, 73(2), 204–226.CrossRefGoogle Scholar
  95. Yingwattanakul, P., & Moschis, G. P. (in press). A life course study of the effects of experienced life events on the onset and continuity of preventive healthcare behaviors. Health Marketing Quarterly.Google Scholar

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • George P. Moschis
    • 1
  1. 1.Department of MarketingGeorgia State UniversityAtlantaUSA

Personalised recommendations