Thomas Korankye’s research while affiliated with University of Arizona and other places

This study examines the association between the big five “OCEAN” personality traits and late-life categorical spending regret. The categorical spending regrets examined are housing, food, clothing, appliances/furnishings, cars, leisure, child-related expenses, and providing financial help. Openness was associated negatively with spending regret on food. Conscientiousness was associated positively with spending regret on appliances/furnishings and cars. Extraversion was associated negatively with spending regret on food, cars, and providing financial help. Agreeableness was associated positively with spending regret on food, clothing, leisure, and providing financial help. The results for Neuroticism indicated no statistically significant association between the OCEAN personality traits and the categorical spending regrets tested. The findings provide insight into the psychological mechanisms underlying consumer spending regret and offer additional support for research on the psychological benefits of personality-matched spending.

This study examines data from the U.S. 2018 and 2019 Survey of Household Economics and Decision making (SHED) to understand the association between student loan debt and emergency-saving decisions, including the moderating role of financial knowledge. Controlling self-selection bias through a propensity score and coarsened exact matching approach, the findings reveal that individuals with student loan debt are less likely to save for financial emergencies. The findings also show that financial knowledge is positively associated with a higher likelihood of having emergency savings. Furthermore, the results from the moderating analysis indicate a statistically significant interaction effect. Based on the empirical results and the corresponding interaction plots, the findings suggest that targeted financial education may lead to improved financial outcomes for student loan borrowers, rather than assuming that such education occurred prior to a loan application.

This study examines the propensity of responding “don’t know” (DK) to a set of financial literacy questions provided by the National Financial Capability Study (NFCS), a nationally representative U.S. data set. When given the opportunity to respond correctly, incorrectly, or DK, the inclusion of a DK response item uniquely encompasses facets of financial literacy, which are often overlooked. While researchers utilizing the NFCS have historically treated these responses as incorrect in financial literacy assessments or excluded/dropped DK responses in empirical analyses, this study’s findings suggest that the interpretation of DK responses may be better viewed as an amalgamation of survey participants’ uncertainty, response confidence, ambiguity regarding the question, or unwillingness to respond, rather than an outright lack of financial literacy. The empirical results suggest that females and those without financially independent children tend to respond DK more frequently to the financial literacy questions examined and that those who are older, married, highly educated, retired, have higher incomes, and current and former military personnel tend to select DK less frequently. Compared to Whites, Blacks are more likely and Asian/Pacific Islanders are less likely to answer DK.

This study examines how automatic enrollment and employer contribution provisions relate to the retirement plan participation decisions of Millennials using data from the 2018 U.S. Financial Industry Regulatory Authority’s (FINRA) Millennial Investment Study. The analysis controls for various factors such as total debt, household income, risk tolerance, and investable assets. The findings underscore the notion that automatic enrollment and employer contribution provisions are associated with an increased likelihood of participation in retirement plans among Millennials. The empirical results reveal that the absence of auto-enrollment, lack of employer-matching contributions, or communication inadequacies are fundamental reasons for Millennials’ non-participation in employer retirement plans. These findings have important implications for employer retirement plan design and the effectiveness of their communication strategies.

Recent developments in cognitive psychology and behavioral economics may explain the lower-than-predicted asset decumulation behavior posited by traditional life-cycle models during retirement, dubbed the retirement consumption puzzle. This study examines if mental accounting could be used to explain the retirement consumption puzzle. Utilizing panel data collected from the 1992–2018 Health and Retirement Studies, retiree age and age squared are examined using fractional polynomials and fixed effects regressions for their associations with varying categorical retiree asset decumulation patterns, including retiree wealth, nonhousing wealth, stocks, retirement accounts, bonds, liquid assets, vehicles, primary residence, and home equity. The results suggest that varying asset decumulation behaviors exist among retirees, which could be explained by retirees’ discretionary spending propensities. The discussion highlights the importance of understanding retiree behavioral spending constraints to allow for smooth consumption paths.

Purpose Research shows that having student loan debt in retirement is associated negatively with life satisfaction, suggesting that student debt is a bane of retiree well-being. The rationale for this study is to determine the factors related to owing student debt in retirement, given the adverse effects on the well-being of retired households. Design/methodology/approach The study utilizes pooled cross-sectional data from the 2015 and 2018 U.S. National Financial Capability Study. The empirical analysis uses a sample of retired Americans aged 65 years and older (N = approximately 8,000) and estimates two-block logistic regression models to examine the effects of demographic, socioeconomic and behavioral factors on student loan indebtedness in retirement. A sensitivity analysis is performed for the subsample of retirees holding student debt for their children's education. Statistical interpretations use odds ratios. Findings The findings indicate that financial literacy, age, homeownership and high subjective financial knowledge are associated with a low likelihood of holding student loan debt in retirement. However, being Black, having postsecondary education, having difficulty covering expenses, having financially dependent children, having high-risk preferences and spending more than income increase the likelihood of holding student debt in retirement. The ensuing discussion will assist financial planners and educators identify practical ways to shape decisions regarding student loan debt in retirement. Research limitations/implications The amount of student loan debt is unavailable in the dataset for analysis. One cannot infer causal relations from the study. The factors examined do not reflect the time the student loan was obtained. Originality/value The study focuses on the determinants of student loan indebtedness among retired Americans rather than young adults or older adults on the verge of retirement. The paper enhances the understanding of student loan holdings in the decumulation phase of the life cycle. Many US individuals have low retirement savings from which they draw a retirement income. The more the student debt burdens on retired Americans, the greater the likelihood of outliving their resources and experiencing poverty.

This study investigates the relationship between baby boomers’ personality traits and their student loan indebtedness in the United States. This article utilizes the 2014 data set from the 1979 cohort of the U.S. National Longitudinal Survey of Youth, applies survey weights, estimates multiple probit models, and computes marginal effects. The results reveal that those with greater openness are more likely to have student loans for themselves, while those with greater neuroticism are less likely to have student loans for themselves and for their children. Additional analyses based on core/trailing boomer status, gender, and income subsamples show the differing roles of each personality trait on student loan indebtedness. The findings build upon the literature by providing evidence that personality is significantly associated with student loan indebtedness and that this relationship is robust to translate into student debt management behavior.

This study aims to examine the effects of student loan debt on the decisions of U.S. married households to invest in stocks located in non-retirement accounts. Using longitudinal datasets from the 2011 to 2017 U.S. Panel Study of Income Dynamics and a fixed effects logit model, the results show mixed findings. The presence of student debt decreases the probability that married households will own stocks, but the amount of student debt does not show a statistically significant effect. The findings suggest that the incidence of student debt raises the perception of liquidity constraints and debt burden among married households.